Terms / rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of H2 each . Each holder of equity shares is entitled to one vote per share and dividend on the shares held.

(ii) I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(i) Capital Reserve:

Majorily consists of capital reserve standing in books against acquisition of business unit.

(ii) Share pending issue

Share pending issue is created in relation for issuance of shares for merger of Pranavaditya Spinning Mills Limited (Subsidiary) with the Company.

(iii) Securities Premium:

Securities Premium is created when shares issued at premium.

(iv) Retained Earning:

Retained earnings represents accumulated profit as on reporting date. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.

(v) Effective Portion of Cash Flow Hedges:

The cash flow hedge reserve is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges, as described in accounting policy Note 3.23.

(vi) Other Items of other Comprehensive Income (Remeasurement of defined benefit obligation):

Reserve for remeasurement of defined benefit obligations represents the effects of remeasurement of defined benefit obligations on account of actuarial gains and losses.

(a) In terms of EPCG Licences issued, the company has export obligation for H34,983 Lakhs (previous year H80,349 Lakhs), which is to be fulfilled over an average period of 6 years. The Company has completed the export obligation to the extent of H24,116 Lakhs (previous year H77,810 Lakhs) till the current year and are under process of redemption. Further, there are licenses issued by the DGFT amounting to H 10,779 Lakhs (previous year H2,539 Lakhs) for which capital goods are under imports.

(b) On account of a dispute in relation with Electricity Duty on electricity generated for captive use between 01.04.2000 and 30.04.2005 amounting to H292.07 Lakhs (previous year H292.07 Lakhs) excluding interest , the Honourable Bombay high court vide its order dated 07.11.2009 passed a judgement in favour of the Company. The MSEDCL has further challenged the same at the Honourable Supreme court . The matter is yet to be heard by the Honourable supreme court. Management is confident on the positive outcome in this matter.

Significant Estimates: The Company has litigations in respect of certain matters. The management does assessment of all outstanding matters and whenever required, further obtain legal advices including those relating to interpretation of law. Based on such assessment, it concludes whether a provision should be recognised or a disclosure should be made.

(a) Total cash outflow for leases during current financial year is H1,083.12 Lakhs (previous year H887.70 Lakhs).

(b) Additions to the Right-of-Use assets during the current financial year is H529.21 Lakhs (previous year H1,649.51 Lakhs).

(c ) There are no sale & leaseback transactions.

(d) Payments associated with short-term leases of equipment, vehicles and all leases of low-value assets are recognised on straight line bases as an expense in profit or loss.

(e ) Short term leases are leases with a lease of12 months or less. There are no low value assets taken on lease during the current year.

(f) When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using its incremental borrowing rate. The weighted average incremental borrowing rate applied is @8.55% (Previous year @8.55%)

b) Elimination of inter-company transactions, including cancellation of 1,43,41,280 (nos.) Equity Shares of face value of H10 each held by the Company in PSML.

Accordingly, the Standalone Financial statements have been restated from the beginning of the preceding period presented i.e. April 1. 2021. The net difference between the consideration and the value of net identifiable assets acquired was H388.01 Lakhs.

(ii) Further, pursuant to the scheme, 654,670 Equity Shares of the Company having face value of H2/- each are allotted to the shareholders of Transferor Company, in the swap ratio of 2:15, and the listing and trading permission for the same have been received. The relevant impact has been given while computing EPS of the prior period covered under the Standalone Financial Statements.

b) Business combinations

The Company has successfully completed the acquisition of Home Textile Business of GHCL Limited (""GHCL"") including its manufacturing facility at Bhilad (Vapi), Gujarat, on a going concern basis, by way of a slump sale, on April 2, 2022 in accordance with the terms of Business Transfer Agreement (""BTA"") dated December 6, 2021 as amended. The asset price allocation is done on the basis of valuation report provided by the Registered Valuer as approved by management.

(i) Summary of acquisition

Indo Count Industries Limited (ICIL) (acquirer) entered into a business transfer agreement with GHCL Limited (seller) to acquire GHCL's home textile (HT) business. The HT business has a fully operational manufacturing facility of 45 million metres annually. The plant is located at Bhilad near Vapi in Gujarat. ICIL has acquired home textile business of GHCL on slump sale basis for an aggregate consideration of H56,230 Lakhs. The Business Transfer Agreement (BTA) between ICIL and GHCL was signed on 07 December 2021 and an amendment agreement was signed on 30 March 2022. The effective date of acquisition was 02 April 2022. Post the acquisition, the said plant has become an integral part of the business of the Company and entire operation of the Company (along with the said plant) is considered as one Cash Generating Unit (CGU). Accordingly, revenue and profit or loss of the said plant since the acquisition date can not be measured

Acquisition-related costs

Acquisition-related costs of H22.00 Lakhs that were not directly attributable to the issue of shares are included in other expenses in the statement of profit and loss and in operating cash flows in the statement of cash flows.

Amounts recognized in other comprehensive income is Nil.

There were certain job work related transaction with GHCL prior to acquisition, however same was not material considering long term view of relationship.

c) Reclassificaiton/Regrouping

The figures for the corresponding previous year have been regrouped/reclassified wherever necessary after considering Company's contractual rights, historical trends and the said disclosure being more relevant to the users of the financial statements and this being more consistent with peers. This change doesn't result in any material quantitative and qualitative impact on the overall financial statements.

Further, in addition to the above, Pursuant to the scheme of amalgamation of Pranavaditya Spinning Mills Limited with the Company with effect from October 1,2020, the figures for the period ended March 31,2022 have been restated to give effect to the aforesaid merger.

Previous year figures of cash flow used in investing activities/operating activities have been reclassified on account of capital advances. Further, necessary regrouping/reclassification has been done to give impact of the above.

46. During the year, the Company has not received any grant. The Company has amortised the grant based on useful life of the plant and machinery and recognised income for current year of H46.22 Lakhs (Previous year H66.78 Lakhs) under other income (Refer Note No. 32).The balance amount of grant is shown as "Deferred Government Grants related to Property, Plant & Equipment" in noncurrent liability H810.05 Lakhs (Previous year H856.27 Lakhs) (Refer Note 25) and other current liability of H46.22 Lakhs (H46.22 Lakhs) (Refer Note 29). The company doesn't have any unfulfilled conditions and other contingencies attaching to same.

Defined contribution plans

Provident Fund: The Company makes contribution to respective regional provident fund commissioners in relation to the workers employed at various location of the Company (as applicable). The Company recognises such contributions as an expense when incurred. The Company has no further obligations beyond its yearly contribution.

Employee State Insurance Scheme: The Company makes contribution towards Employees State Insurance scheme operated by ESIC Corporation (as applicable) . The contributions payable to these plans by the Company are at rates specified in the rules of the scheme. The Company recognises such contributions as an expense when incurred. The Company has no further obligations beyond its yearly contribution.

Labour Welfare Scheme: The Company makes contribution to state government in relation to labour employed at various location of the Company (as applicable). The Company recognises such contributions as an expense when incurred. The Company has no further obligations beyond its yearly contribution.

Defined Benefit Plans:

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The said plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount as per Payment of Gratuity Act, 1972.

Leave Encashment Benefit

The Company provides for leave encashment, a defined benefit retirement plan covering eligible employees. The said plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount computed as per Company policy.

Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: asset volatility, interest rate risk, longevity risk and salary risk as described below:

Asset volatility

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Indian government securities; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out at March 31,2023. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The Company makes annual contributions to the Life Insurance Corporation of India, which is funded defined benefit plan for qualifying employees.

Expected contribution to the defined benefit plan for the next annual reporting period :

(i) The actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out at March 31, 2023. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(ii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

(iii) The salary escalation rate is arrived after taking into consideration the seniority, the promotion and other relevant factors, such as, demand and supply in employment market.

Sensitivity analysis method

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is

unlikely that the change in assumption would occur in isolation of one another as some of the assumption may be correlated.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years and same data,

method and assumptions have been used in preparing the sensitivity analysis which are used to determine period end defined

benefit obligation.

Contribution expected to be paid for the Plan of the Company during the year ended March 31,2024 - H196.06 Lakhs.

Weighted Average duration of the Plan is 12.64 years (previous year 13.16 years)

III. Assets and Liabilities which are measured at FVPL or FVOCI

This note provides information about how the Group determines fair values of various financial assets and financial liabilities measured at FVPL or FVOCI. Fair value of the Company's financial assets and financial liabilities are measured on a recurring basis. Some of the Company's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

50. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group. These risks include market risk (including currency risk, interest rate risk and equity security price risk), credit risk and liquidity risk.

Market Risk

The Company's seeks to minimise the effects of currency risk by using derivative and non derivative financial instruments to hedge risk exposures. The Group has Risk Management Policies to mitigate the risks in commodity prices and foreign exchange. The use of financial derivatives and non-derivatives is governed by the Group's policies approved by the Board of Directors (BOD), which provide principles to use financial derivatives and non-derivative financial instruments, to hedge currency risk and commodity price risk. The Group does not enter into or trade financial instruments, including derivative financial instruments and non-derivative financial instruments for speculative purposes.

The periodical forex management report and commodity risk report as reviewed and approved by the management is placed before the Board of Directors for review.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Group's position with regard to interest income and interest expense 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. Majority of the Group's borrowings are linked to variability in Bank MCLR rate, repo rate, T Bills and SOFR rate .

According to the Company, interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, an analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year. Above 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.

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 in overseas and purchases from overseas suppliers in various foreign currencies.

Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

Market Risk - Price Risk Exposure

The Company's exposure to equity securities' price risk arises from investments held by the Company and classified in the Balance Sheet at fair value through Profit and Loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

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 the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivables. Individual risk limits are set accordingly.

Expected credit loss on financial assets:

Cash and cash equivalent (including term deposits with Banks)

The Company has balances in cash and cash equivalents, term deposits with banks, loans to related parties, investments in debt securities security deposit, interest receivable on loans to related parties and investments. The Company is having balances in cash and cash equivalents, term deposits with banks which are nationalised and scheduled banks having high credit rating At each reporting date management assesses if there are any risk involved on account of adverse credit ratings, media events, regulator such as RBI updates on the bank etc. and hence perceive low credit risk of default.

Loans to related parties

Loans and interest receivable from related parties have low credit risk and the same has low credit risk as the borrower has a strong capacity to meet its contractual cash flow obligations in the near term, and adverse changes in economic and business conditions in the longer term might, but will not necessarily, reduce the ability of the borrower to fulfil its obligations hence no risk of default is perceived on them.

Trade receivables

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 the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivables. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding looking information such as:

- Actual or expected significant adverse changes in business,

- Actual or expected significant changes in the operating results of the counterparty,

- Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,

- Significant increase in credit risk on other financial instruments of the same counterparty,

- Significant changes in the value of the collateral supporting the obligation or in the quality of third party guarantees or credit enhancements.

The Company has customers with capacity to meet the obligations and therefore the risk of default is negligible or nil. Further, based on management estimate, unimpaired amounts that are past due by more than 30 days are collectible in full, considering the minimal historical default rate and analysis of customer credit risk. Based on the assessment the future market conditions and macro environment of the business is not adverse/negative and hence no impairment loss has been recognised during the reporting periods in respect of trade receivables.

Other financial assets

Based on the credit risk assessment, the ECL is provided on a forward looking basis using the expected credit loss (ECL) model.

Significant estimates and judgements: Impairment of financial assets. The impairment provision for financial assets disclosed above are based on assumption about risk of default and expected loss rates. The Company uses judgement in marking these assumptions and selecting the imputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of the financial assets and liabilities.

The amount of unused borrowing facilities (fund and non-fund based) available for future operating activities and to settle commitments is H80,519 Lakhs as at March 31,2023 (Previous year H32,673 Lakhs)

Derivative Financial instruments

The Company has adopted a Risk Management policy approved by the Board of Directors of the Company for managing foreign currency exposure. The policy enumerates the mechanism for Risk Identification, Risk Measurement and Risk Monitoring. The policy has approved a set of financial instruments for hedging foreign currrency risk. The Company mainly uses forward contracts to manage the foreign currency risk.

51 Capital Management

(a) Risk management

The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity. The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. 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.

The Company's objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• Maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:

net debt (total borrowings and lease liabilities net of cash and cash equivalents) divided by total'equity'(as shown in the balance sheet)

The capital structure of the Company consists of net debt (borrowings as detailed in Notes 22 and 26 offset by cash and cash equivalents in Note 16) and total equity of the Group. The Company is not subject to any externally imposed capital requirements.

Notes

1 Earning for Debt Service - Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other adjustments like loss on sale of Fixed assets - profit on sale of Fixed assets

2 Debt Service - Finance Cost Lease expense Long term borrowings paid during the year

3 Cost of goods sold - Cost of Materials Consumed Purchase of Stock-In-Trade Changes in Inventories of Work-In-Progress, Stock-In-Trade and Finished Goods Employee costs excluding Director's remuneration Depreciation Other expenses (exclusion in other expenses - Commission, freight outwards, other selling expenses, loss on sale of assets, Provision for doubtful debts and miscellaneous expenses)

4 Net Revenue from operations - Revenue from Operations - Other Operating Revenue

5 Net Purchases - Total purchases of Raw material & components, Purchase of Stock-In-Trade and Purchases of Stores, Dyes and Packing Materials

6 Earning before Interest and Taxes - Profit before taxes Finance Charges

7 Capital Employed - Equity Non Current borrowings Current Borrowings Deferred Tax Liabilities

8 Total Debt - Long term borrowings Short term borrowings

54(a) Additional regulatory information required by Schedule III

i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the group with banks and financial institutions were not in agreement with the unaudited books of account, however, the Company has filed revised returns or statement with such banks and financial institutions subsequent to the year end which are in agreement with the unaudited books of account.

iii) Wilful defaulter

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

iv) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companies (Restriction on number of Layers) Rules, 2017.

vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year except for scheme of amalgmation reported under note no 45 of the Financial Statements.

vii) Utilisation of borrowed funds and share premium

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

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

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

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

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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix) Details of crypto currency or virtual currency

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

x) Valuation of Property, plant and equipments, right-of-use assets and intangible asset

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

54(b) Other regulatory information

i) Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties other than mentioned below are in the name of the Company. (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note(s) [6]

ii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

iii) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

55 The Company has approved its Financial Statements in its board meeting dated May 30, 2023.

Signatures to Note 1 to 55 which form an integral part of Financial Statements