(b) 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 held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

(ii) In 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 their shareholding.

(i) Capital Reserve:

Majorly consists of capital reserve standing in books against acquisition of business unit and will be utilised in accordance with the provision of the Act

(ii) Securities Premium :

Securities Premium is created when shares were issued at premium and will be utilised in accordance with the provision of the Act.

(iii) Retained Earnings:

Retained earnings represents accumulated profit as on reporting date and can be utilised in accordance with the provision of the Act.

(iv) Effective Portion of Cash Flow Hedges:

Represents effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges as described in accounting policy Note 2.10. These are subsequently reclassifiable to the statement of profit and loss.

(v) Remeasurement of defined benefit obligation:

Remeasurement of defined benefit obligations represents the effects of remeasurement of defined benefit obligations on account of actuarial gains and losses. These are not subsequently reclassifiable to the statement of profit and loss.

3) 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 High Court of India vide its order dated 07.11.2009 passed a judgement in favour of the Company. The MSEDCL has further challenged the same at Honourable Supreme Court of India. The matter is yet to be heared by the Honourable Supreme Court of India. Management is confident on the positive outcome on this matter.

Notes:

(a) It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursement in respect of the above contingent liabilities.

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.

c) In terms of EPCG Licence issued and utilised, the Company has an export obligation for H15,581.14 lakhs (previous year H21,321.81 lakhs), which is to be fulfilled over an average period of 6 years. The Company has completed the export obligation to the extent of H13,866.78 lakhs (previous year H20,120.73 lakhs) till the year end and are under process of redemption. Further, there are licenses issued by the DGFT amounting to H1,714.36 lakhs (previous year H1,201.08 lakhs) for which capital goods are under imports.

d) Refer Note 51 for corporate guarantee given for Indo Count Global Inc., USA and outstanding as at year end. Also, in respect of Indo Count UK Ltd., the Company has issued a letter of support for assessment of their going concern.

(a) Previous year figures are given in brackets.

(b) Related parties enlisted above are those having transactions with the company during the year or previous year.

(c) The above transactions were done in the ordinary course of business and on normal commercial terms and conditions.

(d) As the liabilities for defined benefit plans and leave entitlements are provided on actuarial basis for the Company as a whole, the amounts pertaining to Key Management Personnel or relative of key management personnel are not identified separately and therefore not included.

43. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the Company. Chairman and vice chairman and chief executive officer of the Company are the chief operating decision makers. The Company operates only in one Business Segment i.e. ‘Textile Business’ which constitutes a single reporting segment.

The Company is domiciled in India. For details of revenue from operations from external customer location wise, refer note 32 and 49B of the Standalone Financial Statements.

No Non Current assets (other than financial assets) of the Company are physically located outside India.

Defined contribution plans

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

Labour Welfare Scheme: The Company makes contribution to state government in relation to labour employed at various locations of the Company (as applicable). The Company recognises such contributions as an expense when incurred. The Company has no further contractual or constructive 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.

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 defined benefit obligation was carried out at March 31, 2025. 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.

(i) 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.

(ii) 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.

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

Contribution expected to be paid for the Plan of the Company during the year ended March 31, 2026 - H523.26 lakhs.(Previous year H383.66 lakhs).

Weighted Average duration of the Plan is 12.59 years (previous year 12.88 years).

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.

II. Assets and liabilities which are measured at amortised cost for which fair values are disclosed

Fair value of cash and short-term deposits, security deposits, trade receivables, loans and other current financial assets, trade payables, other current financial liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to the short-term maturities of these instruments. Carrying value of borrowings is approximately same to the fair value as the borrowings has been taken at floating rates.

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

This note provides information about how the Company 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.

The Company has made temporary investments in bonds, mutual funds and corporate deposits for short term business purposes, with the intent to liquidate these investments as needed for operational requirements.

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).

49. 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 Company. These risks include market risk (including currency risk, interest rate risk and equity security price risk), credit risk and liquidity risk.

A) Market Risk

The Company seeks to minimise the effects of price and currency risk by using derivative financial instruments to hedge risk exposures. The company has Risk Management Policies to mitigate the risks in commodity prices and foreign exchange. The use of financial derivatives is governed by the company'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 Company does not enter into or trade financial instruments, including derivative financial instruments and non-derivative financial instruments for speculative purposes. During the year, the Company has not taken any derivative contracts to hedge fluctuation in Commodity prices.

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.

i) 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 Company'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 Company's borrowings are linked to variability in Bank MCLR rate, repo rate and T Bills.

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.

ii) Foreign Currency Risk

The Company operates internationally and portion of the business is transacted in multiple 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.

a) Exposure to Foreign Currency Risk

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

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward/option contracts to hedge exposure to foreign currency risk.

iii) Price Risk

a) Exposure to price risk

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

B) 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:

The Company has balances in cash and cash equivalents, term deposits with banks, investments, loans to related parties, security deposit, interest receivable on loans to related parties.

i) Cash and cash equivalent (including term deposits with Banks) 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. Further, investments are made in reputed institutions/funds houses/banks and having high credit ratings. 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. Considering its assessment, these balances are considered to have low credit risk of default.

ii) 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 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 risk of default is considered to be low for these balances.

iii) Other financial assets:

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward looking information.

iv) Trade receivables:

Credit Risk arises from the possibility that the 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, credit rating analysis of major customers and analysis of historical bad-debts and ageing of trade receivables. The Company has customers with capacity to meet the obligations and do not believe that there are any particular customer or group of customers that would subject to any significant credit risks in the collection of trade receivable.

Based on management assessment , trade receivable are collectible in full considering analysis of customer credit risk. Further, the historical default rate is minimal. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Based on the assessment considering historical default, ageing of trade receivables, the future market conditions and macro environment of business not being adverse/ negative, the expected credit loss, if any, during the reporting period in respect of trade receivable is not material and hence,no impairment loss has been recognised.

Moreover the default, if any, of export receivables are covered by Export Credit Guarantee Corporation of India (ECGC).

C) 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 H62,283 lakhs as at March 31, 2025 (H54,099 lakhs as at March 31, 2024).

D) 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.

50A. 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 Company is not subject to any externally imposed capital requirements.

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, donation to political party, CSR Expenses, Auditor's Remuneration and miscellaneous expenses excluding certain direct production expenses)

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

5 Net Purchases = Total purchases of Raw material and components, Purchase of Stock-In-Trade and Purchases of Stores, Dyes and Packing Materials and other expenses related to Trade Payable

6 Earning before Interest and Taxes = Profit before taxes Finance Costs

7 Capital Employed = Equity Non Current borrowings Current Borrowings Deferred Tax Liabilities Lease Liabilities -Intangible Assets - Intangible Assets under development

8 Total Debt = Non Current borrowings Current borrowings Lease Liabilities

53(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 (including revisions thereof) filed by the Company with banks and financial institutions were 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 other lendor.

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.

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 Company (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.

55. The Company has initiated the digital transformation journey for standardizing, optimizing, and re-engineering various business processes, including manufacturing, supply chain, logistics, and procurement. The focal point of this implementation is the design, development, and deployment of a robust digital core utilizing SAP S/4HANA Cloud®. The initiative aims to unlock operational efficiencies, chart new avenues for growth and ensure compliance requirements. Subsequent to the year-end, the Company has gone live with SAP S/4 HANA effective April 01, 2025 in respect of certain modules.

56. The Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) has six CICs as part of the Group.

57. Events occurring after reporting period

The Company evaluated subsequent events through May 30, 2025, the date the financial statements were available for issuance, and determined that there were no additional material subsequent events requiring disclosure.

58. The standalone financial statements for the year ended March 31, 2025, have not been signed by the Chief Executive Officer due to his inability on account of medical reasons.

Signatures to Note 1 to 58 which form an integral part of Financial Statements