There are no capital work-in-progress, whose completion or cost compared to its original plan is overdue.

Amount capitalised under building block includes B287.24 lakhs (P.Y.: B527.83 lakhs) being the amount of capital expenditure incurred on self-constructed assets. Further such amount included under CWIP is aggregating to B Nil (P.Y.: B30.25 lakhs).

2.1.3 Building includes the value of 14,000 (P.Y.: 14,000) shares of B100 each in Synthofine Estate CHS Ltd and value of 10 (P.Y.: 10) shares of B50 each in Gautam Chemical Industrial Premises CHS Ltd.

2.1.4 Right to Use - Building includes building constructed on lease hold land having Gross block of B 226.65 lakhs (P.Y.: B 226.65 lakhs).

2.1.5 In the year 2014-15, the Company has acquired freehold land with integrated structures for a composite value whose conveyance is registered and municipal records updated. The value of the structure is determined based on estimated depreciated value of structures and the balance is considered as the value of the land. In respect of the land, the Company has undivided share in land. Also an insignificant portion of land is unlawfully occupied by an illegal occupant and the said occupant had raised some illegal structures which were demolished by the Municipal Corporation. The said illegal occupant has filed a suit in the Hon'ble High Court for his alleged claim in respect of the portion of the land illegally occupied by him. The Company has refuted the alleged claim of the illegal occupant and is defending the suit. The Company has filed an Eviction suit against the illegal occupant in the Hon'ble Small Causes Court. Both the said matters are sub-judiced. There is insignificant impact of these litigations on the financial position of the Company.

2.1.6 The Company does not have any proceedings initiated or are pending against it, for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

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

2.2.1 The Company had invested in aggregate B 345.50 lakhs in Joint Venture “White Knitwear Private Limited” (WKPL). The WKPL had acquired land in Surat Special Economic Zone (SEZ) and constructed factory building for setting up of manufacturing unit for production of Knitwear Apparels for exports. However due to slowdown in International market, SEZ could not take off and most of the members of SEZ shelved their projects and approached to Gujarat Industrial Development Corporation (GIDC) and State and Central government for de-notification of SEZ.

Gujarat Industrial Development Corporation vide its circular No. GIDC/CIR/Distribution/Policy/13/05 dated 14.03.2013 has de-notified the SEZ and conceded the members to convert and use the erstwhile land in SEZ as Domestic Tariff Area (DTA) subject to fulfillment of conditions stated therein. WKPL vide its letter dated 04.04.13 has consented for de-notification of its plot of land and undertaken to complete the formal procedure for the same.

Post de-notification joint venture partners shall dispose of the Company/land and building and realise the proceeds to return it to joint venture partners.

No provision for impairment in the value of investment is considered necessary for the year ended March 2023 based on valuation of the underlying property in joint venture.

2.9.1 The working capital borrowings are secured by hypotication of inventory of the Company (refer note no 2.21).

2.9.2 The Company follows adequate accounting policy for writing down the value of Inventories towards slow moving, non-moving and surplus inventories. Write down of Inventories (Net of reversals) for the year B 320.00 lakhs (P.Y.: B 320.00 lakhs), this is included as part of cost of materials consumed and changes in inventory of finished goods, work-in-progress and stock in trade in statement of profit and loss. Inventory values shown above are net of the write down.

2.17.1 The Company has only one class of shares referred to as equity shares having a par value of B 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian B The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. The remittance of dividend outside India is governed by Indian law on foreign exchange and is subject to applicable distribution taxes.

As per the Companies Act, 2013, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in the event of liquidation of the Company. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.17.4 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, there are no preferential amounts inter se equity shareholders. The distribution will be in proportion to the number of equity shares held by the shareholders (After due adjustment in case shares are not fully paid up.)

2.17.5 For the period of five years immediately preceding the date as at which the Balance Sheet is prepared:

(i) No shares have been allotted as fully paid-up without payment being received in cash.

(ii) The Company issued and allotted 49,300,148 fully paid up Bonus Equity shares of B 10 each in the ratio of 4:1 (i.e. 4 Bonus Equity shares for every 1 existing equity share of the Company) to the shareholders who held shares on December 17, 2021 (Record date).

(iii) No shares have been bought back by the Company.

2.17.6 Sha res held by promoters as defined in the Companies Act, 2013 at the year end (refer note 2.60)

2.18.1

• Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

• General Reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

• Retained Earnings: Retained Earnings are the profits the Company has earned till date, less any transfer to General Reserve, dividends or other distributions paid to the shareholders. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

• Business Progressive fund: The Company has created “Business Progressive Fund” by appropriating a sum of B Nil (P.Y.: B Nil) lakhs out of its profits to maintain normal growth in sluggish market conditions and support superior growth for longterm. The said fund shall be for the purpose of launching & promoting new products, advertisement campaigns, promotional schemes and initial support to master stockiest and franchisees for development of retail business, reinforce existing channels of sales etc. The amount of fund is specifically earmarked and invested in liquid mutual funds or any other safe and highly liquid investments. The Company has made adequate provisions in accordance with Indian Accounting Standard (AS) -37 in normal course of business. INDAS-37 does not permit providing for expenses where present obligation does not exist or there is no fixed commitment.

Accordingly the Company has opted to create Business Progressive Fund. Further addition to the aforesaid fund shall be reviewed from time to time considering business environment and conditions and the income accrued from the fund. Any accretion to the investment shall be credited to Statement of Profit and Loss.

Maturity profile:

The average expected remaining life time of the plan members is 9 years (P.Y.: 8 years) as at the date of valuation. This represents the weighted average of the expected remaining lifetime of all plan participants.

The sensitivity analysis above has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with Life Insurance Corporation of India. The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets comprising of Insurance Policy with LIC of India is based on the historical results of returns given by LIC of India.

The Company expects to contribute B 200.00 lakhs to gratuity trust for contribution to LIC of India in financial year 2023-24.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short-term benefit which is recognised as an expense at the un-discounted amount in the year in which the related service is rendered and disclosed under other financial liabilities.

c) Death in service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death in service benefit given to eligible employees. The insurance premium of B 60.03 lakhs (P.Y.: B 43.62 lakhs) is recognised in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National Pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is B 594.46 lakhs (P.Y.: B 523.39 lakhs).

The Hon'ble Supreme Court of India (“SC”) by its order dated February 28, 2019, in the case of Surya Roshani Limited & others V/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Based on the same, the Company has changed its Salary Structure from April 1, 2019, but impact of the previous years is not ascertainable, since the retrospective date of applicability of the same is not yet clarified.

2.47: Leases - Ind AS 116:

a) As Lessee:

Effective April 1, 2019, the Company adopted Ind AS 116 and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at an amount equal to lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet immediately before the date of initial application.

b) As Lessor:

The Company has given certain part of its property on operating lease. These lease arrangements are for a period of 9 years and cancellable solely at discretion of the lessees. Rental income from leasing of property of B 108.00 lakhs (P.Y.: B 104.70 lakhs) is recognised in the Statement of Profit and Loss. The initial direct cost (if any) is charged off to expenses in the year in which it is incurred.

The Company has not given any property under non-cancellable operating lease.

The above Provision has been grouped under the head ‘Current Provisions' in Note 2.26.

The timing of the outflow is dependent on various aspects / fulfillment of conditions and occurrence of events. Such provisions are made based on the past experience and assessment of rates and taxes. However, it is most likely that outflow is expected to be within a period of one year from the date of Balance Sheet.

2.50: Contingent Liabilities:

a) Disputed demands in respect of income tax not acknowledged as debt by the Company of B 83.16 lakhs (P.Y.: B 47.51 lakhs). Future cash outflows in respect of above are dependent on outcome of matter under dispute.

In addition to the above, in respect of Assessment year 2005-2006, there was tax demand of B 68.94 lakhs (P.Y.: B 68.94 lakhs) which had been adjusted by the tax authorities against refund due to the Company in respect of other years. During F.Y. 2015-16, the Company had received favourable Order passed by the ITAT, Mumbai against which the Income Tax Department has filed the appeal before the Bombay High Court and was admitted dated November 27, 2021.

Future cash outflows in respect of above are dependent on outcome of matter under dispute.

b) The Company had in earlier years purchased capital assets under EPCG license against which the Company does not have any balance export obligation at the end of the year.

As at the year-end, amount of outstanding bonds executed by the Company in favour of customs authority aggregates to B Nil (P.Y.: B 700.24 lakhs).

c) Bank guarantees by the given bank on behalf of the Company of B 206.69 lakhs (P.Y.: B 95.62 lakhs).

d) The Company's contingent liability and capital/other commitment in relation to joint venture B Nil (P.Y.: B Nil).

2.55: Fair Value Measurement:

The management assessed that cash and bank balances, trade receivables, trade payables, cash credits and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: Th is hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all equity investments and units of mutual funds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

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

2.56: Financial risk management objectives and policies:

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade 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 and other receivables, investments and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: (i) interest rate risk and (ii) currency risk. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings. The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other postretirement obligations; provisions.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

i) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's short-term debt obligations with floating interest rates. The Company has sufficient amount of liquid investments to mitigate the interest risk on its short-term debt obligations.

b) Credit risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables). Also refer note 2.58(b) for details regarding customer concentration.

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 default occurring on 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:

i) Actual or expected significant adverse changes in business,

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

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

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

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

Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company.

Assets in the nature of Investment, security deposits, loans and advances are measured using 12 months expected credit losses (ECL). Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. Trade receivables are measured using lifetime expected credit losses.

Financial Assets for which loss allowances is measured using the Expected Credit Losses (ECL):

c) Liquidity risk:

The Company's principal source of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements.

As on March 31, 2023, the Company had working capital of B 40,072.38 lakhs (P.Y.: 135,255.74 lakhs) including cash and bank balance of B 17,039.45 lakhs (P.Y.: 119,180.16 lakhs) and current investments of B 12,692.95 lakhs (P.Y.: 111,847.95 lakhs).

The Company is not exposed to significant liquidity risk based on past performance and current expectations. The Company believes that the cash and cash equivalents, cash generated from operations and available un-drawn credit facilities, will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

Note: Investments in subsidiary and Joint Venture are valued at cost less impairment loss (if any) in accordance with Ind AS 27 ‘Separate Financial Statements', consequently the same is not disclosed in maturity profile tabulated above.

The note below sets out details of the undrawn facilities that will be available for future operating facilities and to settle capital commitments of the Company:

2.57: Capital Management: a) Risk Management:

For the purposes of the Company's capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management's judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

2.58: Segment Reporting:

a) The Company is engaged in the business of manufacturing and marketing of apparels & trading of lifestyle accessories/ products. The Company is also generating power from Wind Turbine Generator. The power generated from the same is predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold limit stipulated under IND AS 108 “Operating Segments” and hence it does not require disclosure as a separate reportable segment. As defined in Ind AS 108 ‘Operating Segments', the Chief Operating Decision Maker evaluates the Company's performance related to Apparels business and allocates resources based on an analysis of various performance indicators. Accordingly, Sale of Apparels is considered as only business segment.

b) The customer base of the Company is diverse with different distribution channels and store formats except in case of one customer where the concentration is greater than other parties.

2.63: 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.

2.64: Utilisation of Borrowed funds and Share premium:

a) During the year, the Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall: (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (i) directly or indirectly issued or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

2.65: 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.

2.66: Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other than already disclosed above) are either Nil or Not Applicable.

f) Refer note 2.58(b) for details regarding customer concentration.

2.69: The new Code on Social Security, 2020 has been enacted, which could impact the contributions by the Company towards Provident Fund, Gratuity and bonus. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. The Company will complete its evaluation and will give appropriate impact in the financial statements in the period in which the Code becomes effective and the related rules are published.

2.70: The Company has incorporated wholly-owned subsidiary company K-Lounge Lifestyle Limited on February 25, 2021 as per certificate of incorporation received by the Company. The Authorised Share Capital of the said subsidiary company is B 1,000.00 lakhs and paid-up Share Capital the said subsidiary company is B 500.00 lakhs. The Company has subscribed entire paid-up Share Capital of B 500.00 lakhs on April 19, 2021.

Further during the year, company has given loan (including accrued interest) of B 286.12 lakhs to its subsidiary company. The subsidiary company is yet to commence the business operation as on the date.

2.71: During the year the Company has regrouped / reclassified the following items and accordingly the prior year comparatives (including ratios) have also been reclassified / regrouped. These changes did not have any impact of the reported profit after tax and total equity:

a) Bank overdraft has been reduced from cash and cash equivalents in the cash flow statement and accordingly the cash and cash equivalent for previous year is B 14,464.13 lakhs as against B 19,123.98 lakhs (also refer note (i) to cash flow statement).

b) The Company has disclosed the right to return assets and refund liabilities separately effective current year under “Other Current Assets (refer note 2.16) and Other Current Liability (refer note 2.25)”. This was earlier forming part of provisions and inventories. (also refer note 1.12 (d)).