2.12 Provisions and contingent liabilities

"Provisions are recognized when there is a
present obligation as a result of a past event, it is
probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation and there is a reliable
estimate of the amount of the obligation.
Provisions are measured at the best estimate of
the expenditure required to settle the present
obligation at the Balance sheet date."

If the effect of the time value of money is
material, provisions are discounted using a
current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in the
provision due to the passage of time is
recognized as a finance cost.

The Company records a provision for
decommissioning costs. Decommissioning
costs are provided at the present value of
expected costs to settle the obligation using
estimated cash flows and are recognized as part
of the cost of the particular asset. The cash flows

are discounted at a current pre-tax rate that
reflect s t h e ri sks speci fi c to th e
decommissioning liability. The unwinding of the
discount is expensed as incurred and recognized
in the statement of profit and loss as a finance
cost. The estimated future costs of
decommissioning are reviewed annually and
adjusted as appropriate. Changes in the
estimated future costs or in the discount rate
applied are added to or deducted from the cost of
the asset.

Contingent liabilities are 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 or 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.

2.13 Cash and cash equivalents

"Cash and cash equivalent in the balance sheet
comprise cash at banks, cash on hand and
short-term deposits net of bank overdraft with
an original maturity of three months or less,
which are subject to an insignificant risk of
changes in value. For the purposes of the cash
flow statement, cash and cash equivalents
include cash on hand, cash in banks and short¬
term deposits net of bank overdraft."

2.14 Corporate social responsibility (CSR)

Provisions are recognised for all CSR activities
undertaken by the Company for which an
obligation has arisen during the year and are
recognized in Statement of profit on loss on
accrual basis. No provision is made against
unspent amount, if any.

2.15 Government grants and subsidies

Grants from the government are recognised at
their fair value where there is a reasonable
assurance that the grant will be received and the
group will comply with all attached conditions.
Government grants relating to income are
deferred and recognised in the profit or loss over
the period necessary to match them with the
costs that they are intended to compensate and
presented within other income.

2.16 Borrowing Costs

Interest and other borrowing costs attributable
to qualifying assets are capitalised. Other
interest and borrowing costs are charged to
Statement of Profit and Loss.

A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity.

(a). Financial assets

[i] . Initial recognition and measurement

At initial recognition, financial asset is measured
at its fair value plus, in the case of a financial
asset not at fair value through profit or loss,
transaction costs that are directly attributable to
the acquisition of the financial asset.
Transaction costs of financial assets carried at
fair value through profit or loss are expensed in
profit or loss.

(ii) . Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in following
categories:

a) at amortized cost; or

b) at fair value through other comprehensive
income; or

c) at fair value through profit or loss.

The classification depends on the entity's
business model for managing the financial
assets and the contractual terms of the cash
flows."

Amortized cost: Assets that are held for
collection of contractual cash flows where those
cash flows represent solely payments of
principal and interest are measured at
amortized cost. Interest income from these
financial assets is included in finance income
using the effective interest rate method (EIR).

Fair value through other comprehensive income
(FVOCI): Assets that are held for collection of
contractual cash flows and for selling the
financial assets, where the assets' cash flows
represent solely payments of principal and
interest, are measured at fair value through
other comprehensive income (FVOCI).
Movements in the carrying amount are taken
through OCI, except for the recognition of
impairment gains or losses, interest revenue
and foreign exchange gains and losses which are
recognized in Statement of Profit and Loss.
When the financial asset is derecognized, the
cumulative gain or loss previously recognized in
OCI is reclassified from equity to Statement of
Profit and Loss and recognized in other gains/
(losses). Interest income from these financial
assets is included in other income using the
effective interest rate method.

Fair value through profit or loss: Assets that do
not meet the criteria for amortized cost or FVOCI
are measured at fair value through profit or loss.
Interest income from these financial assets is
included in other income.

Equity instruments:

Investments in subsidiaries are recognised at
cost as per Ind AS 27 less impairment, if any,
except where investments accounted for at cost
shall be accounted for in accordance with Ind AS
105, Non-current Assets Held for Sale and
Discontinued Operations, when they are
classified as held for sale.

All other equity investments are measured at
fair value. Equity instruments which are held for
trading and contingent consideration
recognised by an acquirer in a business
combination are classified as at FVTPL. For all
other equity instruments, the Company may
make an irrevocable election to present in other
comprehensive income subsequent changes in
the fair value (currently no such choice is made).
The Company makes such election on an
instrument-by-instrument basis. The
classification is made on initial recognition and
is irrevocable.

If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognized in the OCI. There is no recycling
of the amounts from OCI to P&L, even on sale of
investment. However, the Company may
transfer the cumulative gain or loss within
equity.

Investment in Limited Liability Partnership
(LLP):

Investments in capital of Limited liability
partnership (LLP), where the Company has
control over these LLP's, are recognised at cost
as per Ind AS 27 less impairment, if any.

(iii). Impairment of financial assets

"The Company assesses on a forward looking
basis the expected credit losses(ECL)
associated with its assets carried at amortised
cost and FVOCI debt instruments. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk. "

The impairment methodology for each class of
financial assets stated above is as follows:

Trade receivables from customers: The
Company applies the simplified approach to
providing for expected credit losses prescribed

by Ind AS 109, which requires the use of the
lifetime expected loss provision for all trade
receivables.

"Debt investments measured at amortised cost
and FVOCI: Debt investments at amortised cost
and those at FVOCI where there has been a
significant increase in credit risk, lifetime
expected credit loss provision method is used
and in all other cases, the impairment provision
is determined as 12 months expected credit
losses.

For recognition of impairment loss on financial
assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If in
subsequent years, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the entity reverts to
recognizing impairment loss allowance based
on 12 month ECL. "

Life time ECLs are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument. The
12 month ECL is a portion of the lifetime ECL
which results from default events that are
possible within 12 months after the year end.

ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the cash
flows that the entity expects to receive (i.e. all
shortfalls), discounted at the original EIR. When
estimating the cash flows, an entity is required to
consider all contractual terms of the financial
instrument (including prepayment, extension
etc.) over the expected life of the financial
instrument. However, in rare cases when the
expected life of the financial instrument cannot
be estimated reliably, then the entity is required
to use the remaining contractual term of the
financial instrument.

ECL impairment loss allowance (or reversal)
recognized during the year is recognized as
income/expense in the statement of profit and
loss. In balance sheet ECL for financial assets
measured at amortized cost is presented as an
allowance, i.e. as an integral part of the
measurement of those assets in the balance
sheet. The allowance reduces the net carrying
amount. Until the asset meets write off criteria,
the Company does not reduce impairment
allowance from the gross carrying amount.

"A financial asset is derecognized only when

a) the rights to receive cash flows from the
financial asset is transferred or

b) retains the contractual rights to receive the
cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to
one or more recipients."

Where the entity has neither transferred a
financial asset nor retains substantially all risks
and rewards of ownership of the financial asset,
the financial asset is derecognised if the
Company has not retained control of the
financial asset. Where the Company retains
control of the financial asset, the asset is
continued to be recognised to the extent of
continuing involvement in the financial asset.

Where the financial asset is transferred then in
that case financial asset is derecognized only if
substantially all risks and rewards of ownership
of the financial asset is transferred. Where the
entity has not transferred substantially all risks
and rewards of ownership of the financial asset,
the financial asset is not derecognized.

(b). Financial liabilities

(i) . Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss and at amortized cost, as
appropriate.

All financial liabilities are recognized initially at
fair value and, in the case of borrowings and
payables, net of directly attributable transaction
costs.

(ii) . Subsequent measurement

The measurement of financial liabilities
depends on their classification, as described
below:

Financial liabilities at fair value through profit or
loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Separated embedded derivatives are also
classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading are
recognized in the Statement of Profit and Loss.

Loans and borrowings

After initial recognition, interest-bearing loans

and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and
losses are recognized in Statement of Profit and
Loss when the liabilities are derecognized as
well as through the EIR amortization process.
Amortized cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortization is included as finance
costs in the Statement of Profit and Loss.

(iii) . Compound financial instruments

Compound financial instruments issued by the
Company which can be converted into fixed
number of equity shares for fixed price at the
option of the holders irrespective of changes in
the fair value of the instrument are accounted by
separately recognising the liability and the
equity components. The liability component is
initially recognised at the fair value of a
comparable liability that does not have an equity
conversion option. The equity component is
initially recognised at the difference between the
fair value of the compound financial instrument
as a whole and the fair value of the liability
component. The directly attributable
transaction costs are allocated to the liability
and the equity components in proportion to their
initial carrying amounts.

Subsequent to initial recognition, the liability
component of the compound financial
instrument is measured at amortised cost using
the effective interest method. The equity
component of a compound financial instrument
is not remeasured subsequently."

(iv) . Derecognition

A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the derecognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognized in the Statement of Profit and Loss as
finance costs.

(c). Offsetting financial instruments

Financial assets and liabilities are offset and the
net amount is reported in the balance sheet
where there is a legally enforceable right to
offset the recognized amounts and there is an
intention to settle on a net basis or realize the
asset and settle the liability simultaneously. The

legally enforceable right must not be contingent
on future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of the
Company or the counterparty.

2.18 Employee benefits

(a) . Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be
settled wholly within 12 months after the end of
the year in which the employees render the
related service are recognized in respect of
employees' services up to the end of the year and
are measured at the amounts expected to be
paid when the liabilities are settled. The
liabilities are presented as current employee
benefit obligations in the balance sheet.

(b) . Other long-term employee benefit obligations

"Compensated Absences: Accumulated
compensated absences, which are expected to
be availed or encashed within 12 months from
the end of the year are treated as short term
employee benefits. The obligation towards the
same is measured at the expected cost of
accumulating compensated absences as the
additional amount expected to be paid as a result
of the unused entitlement as at the year end.

Accumulated compensated absences, which are
expected to be availed or encashed beyond 12
months from the end of the year end are treated
as other long term employee benefits. The
Company's liability is actuarially determined
(using the Projected Unit Credit method) at the
end of each year. Actuarial losses/gains are
recognized in the statement of profit and loss in
the year in which they arise.

Compensated absences can be encashed only
on discontinuation of service by employee."

[c]. Post employment obligations

(i). Defined contribution plan

Provident Fund: Contribution towards provident
fund is made to the regulatory authorities,
where the Company has no further obligations.
Such benefits are classified as Defined
Contribution Schemes as the Company does not
carry any further obligations, apart from the
contributions made on a monthly basis which
are charged to the Statement of Profit and Loss.

Employee's State Insurance Scheme:
Contribution towards employees' state
insurance scheme is made to the regulatory
authorities, where the Company has no further

obligations. Such benefits are classified as
Defined Contribution Schemes as the Company
does not carry any further obligations, apart
from the contributions made on a monthly basis
which are charged to the Statement of Profit and
Loss.

(ii). Defined benefit plans

Gratuity: The Company provides for gratuity, a
defined benefit plan (the 'Gratuity Plan")
covering eligible employees in accordance with
the Payment of Gratuity Act, 1972. The Gratuity
Plan provides a lump sum payment to vested
employees at retirement, death, incapacitation
or termination of employment, of an amount
based on the respective employee's salary. The
Company's liability is actuarially determined
(using the Projected Unit Credit method) at the
end of each year. Actuarial losses/gains are
recognized in the other comprehensive income
in the year in which they arise.

2.19 Earnings per share

"Basic earnings per share is calculated by
dividing the net profit or loss for the year
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year. Earnings
considered in ascertaining the Company's
earnings per share is the net profit or loss for the
year after deducting preference dividends and
any attributable tax thereto for the year. The
weighted average number of equity shares
outstanding during the year and for all the years
presented is adjusted for events, such as bonus
shares, other than the conversion of potential
equity shares, that have changed the number of
equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings
per share, the net profit or loss for the year
attributable to equity shareholders and the
weighted average number of shares outstanding
during the year is adjusted for the effects of all
dilutive potential equity shares."

2.20 Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker regularly monitors
and reviews the operating result of the whole
Company as one segment of manufacturing of
technical textile. Thus, as defined in Ind AS 108
"Operating Segments", the Company's entire
business falls under this one operational
segment and hence the necessary information

has already been disclosed in the Balance Sheet
and the Statement of Profit and Loss.

2.21 Contributed equity

"Equity Shares are classified as equity.

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

2.22 Dividends

Provision is made for the amount of any dividend
declared, being appropriately authorized and no
longer at the discretion of the entity, on or before
the end of the reporting period but not
distributed at the end of the reporting period.

2.23 Rounding off amounts

All amounts disclosed in financial statements
and notes have been rounded off to the nearest
millions as per requirement of Schedule III of the
Act, unless otherwise stated.

3. SIGNIFICANT ACCOUNTING
JUDGMENTS, ESTIMATES AND
ASSUMPTIONS

The preparation of financial statements requires
management to make judgments, 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
years.

3.1 Estimates and assumptions

The key assumptions concerning the future and
other key sources of estimation uncertainty at
the year end date, that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are described below. The
Company based its assumptions and estimates
on parameters available when the financial
statements were prepared. Existing
circumstances and assumptions about future
developments, however, may change due to
market changes or circumstances arising that
are beyond the control of the Company. Such
changes are reflected in the assumptions when
they occur.

(a). Taxes

Deferred tax assets are recognized for unused

tax losses to the extent that it is probable that
taxable profit will be available against which the
losses can be utilized. Significant management
judgment is required to determine the amount of
deferred tax assets that can be recognized,
based upon the likely timing and the level of
future taxable profits together with future tax
planning strategies.

(b) . Defined benefit plans and other long term

benefits (gratuity benefits and compensated
absences)

The cost of the defined benefit plans and other
long term benefits such as gratuity and
compensated absences are determined using
actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases and mortality rates.
Due to the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at
each year end.

The principal assumptions are the discount and
salary growth rate. The discount rate is based
upon the market yields available on government
bonds at the accounting date with a term that
matches that of liabilities. Salary increase rate
takes into account of inflation, seniority,
promotion and other relevant factors on long
term basis.

(c) . Useful lives of property, plant and equipment

"The Company reviews the useful life of
property, plant and equipment at the end of each
reporting period. This reassessment may result
in change in depreciation expense in future
periods."

4. RECENT PRONOUNCEMENTS

(a). Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. During the year
ended March 31,2025, MCA has notified Ind AS 117 -
Insurance Contracts and amendments to Ind As 116 -
Leases, relating to sale and lease back transactions,
applicable from April 1, 2024. The Company has
assessed that there is no significant impact on its
standalone financial statements.