2. Material Accounting Policy Information

The Company has consistently applied the following accounting policies to all periods presented in the
financial statements.

2.1 Statement of Compliance

The financial statements of the Company comply with all material aspects with Indian Accounting
Standards ("Ind AS") as prescribed under section 133 of the Companies Act, 2013 ("the Act"), as notified
under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016, as amended and other accounting principles generally accepted
in India.

Accounting Policies have been consistently applied except where a newly issued accounting standards
is initially adopted or a revision to an existing accounting standard required a change in the accounting
policy hitherto in use.

2.2 Basis of measurement

The financial statements have been prepared under the historical cost convention on accrual basis
except in case of claims lodged with insurance company but not settled, interest on overdue debts
from customers due to uncertainty in realisation, export and other benefits doubtful of recovery are
accounted for on receipt/settlement and the following items, which are measured on following basis
on each reporting date:

- Certain financial assets and liabilities (including derivative instruments) that is measured at fair
value

- Defined benefit liability (assets): present value of defined benefit obligation less fair value of plan
assets.

- Financial instrument - measured at fair value;

However, trade receivables that do not contain a significant financing component are measured at
transaction price.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an
asset or a liability, the Company takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the
measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the company can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

2.3 Functional and presentation currency

These financial statements are presented in Indian National Rupee ('INR'), which is the Company's
functional currency. All amounts have been rounded to the nearest Lakhs, unless otherwise indicated.

2.4 Use of judgements and estimates

In preparing these financial statements, management has made judgements, estimates and assumptions
that affect the application of the company's accounting policies and the reported amounts of assets,
liabilities, income and expenses. Management believes that the estimates used in the preparation of
the financial statements are prudent and reasonable. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to estimates are
recognised prospectively.

A. Judgements

Information about the judgements made in applying accounting policies that have the most
significant effects on the amounts recognised in the financial statements have been given below:

- Classification of financial assets: assessment of business model within which the assets are held
and assessment of whether the contractual terms of the financial asset are solely payments of
principal and interest on the principal amount outstanding.

B. Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting
in a material adjustment in the financial statements for every period ended is included below:

- Measurement of defined benefit obligations: key actuarial assumptions;

- Recognition of deferred tax assets: availability of future taxable profit against which carry¬
forward tax losses can be used;

- Impairment test: key assumptions underlying recoverable amounts.

- Useful life and residual value of Property, Plant & Equipment, Intangible Assets and Right of Use
assets;

- Recognition and measurement of provisions and contingencies: key assumptions about the
likelihood and magnitude of an outflow of resources

- Impairment of financial assets: key assumptions used in estimating recoverable cash flows

- Assessment of recoverability of receivables and advances and such assessment requires
significant management judgement based on financial position of the counter-parties, market
information and other relevant factors.

2.5 Classification of Assets and Liabilities as Current and Non-Current

The Company presents assets and liabilities in the balance sheet based on current/ non-current
classification.

An asset is treated as current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle.

- Held primarily for the purpose of trading

- Expected to be realised within twelve months after the reporting period, or

- Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.

An liability is treated as current when it is:

- Expected to be settled in normal operating cycle.

- Held primarily for the purpose of trading

- Expected to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period.

All other assets/liabilities are classified as non-current. Deferred tax assets and liabilities are classified as
non-current assets/liabilities.

The operating cycle is the time between the acquisition of the assets for processing and their realisation
in cash and cash equivalents.

The Company has ascertained the operating cycle as 12 months for the purpose of current and non¬
current classification of assets and liabilities.

2.6 Non-current assets (or disposal groups) held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if
it is highly probable that they will be recovered primarily through sale rather than through continuing
use. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and
fair value less costs to sell. Once classified as held-for-sale, intangible assets and property, plant and
equipment are no longer amortised or depreciated.

2.7 Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other
than inventories and deferred tax assets) to determine whether there is any indication on impairment.
If any such indication exists, then the asset's recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or
CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less
costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an
asset or CGU exceeds its recoverable amount.

Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised in prior years. A reversal of
impairment loss is recognised immediately in the Statement of Profit & Loss.

2.8 Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets are capitalised as part of the cost of such assets up to the assets are substantially ready for their
intended use or sale. Exchange differences on foreign currency borrowings included in the borrowing
cost when they are regarded as an adjustment to interest costs on those foreign currency borrowings.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they
are incurred.

The loan origination costs directly attributable to the acquisition of borrowings (e.g. loan processing
fee, upfront fee) are amortised on the basis of the Effective Interest Rate (EIR) method over the term of
the loan.

2.9 Foreign currency transactions

Transactions in foreign currencies are recorded by the Company entities at their respective functional
currency at the exchange rates prevailing at the date of the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currency are translated to the functional
currency at the exchange rates prevailing at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in the
statement of profit and loss with the exception of the following:

- exchange differences on foreign currency borrowings included in the borrowing cost when they
are regarded as an adjustment to interest costs on those foreign currency borrowings;

Non-monetary items that are measured at historical cost in a foreign currency are translated using the
exchange rates at the date of initial transactions. Non-monetary items measure at fair value in a foreign
currency is translated using the exchange rates at the date when the fair value is determined.

2.10 Employee benefits

a. Short term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.

b. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is
provided. The company has Provident Fund as defined contribution plan.

c. Defined benefit plans

For defined benefit plan, the cost of providing benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period. The
present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows using yield of government bonds.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset
ceiling (if applicable) and the return on plan assets (excluding interest), is reflected in the balance
sheet with a charge or credit recognised in other comprehensive income in the period in which
they occur. Re-measurement recognised in other comprehensive income is reflected immediately
in retained earnings and will not be reclassified to the statement of profit and loss. Past service cost
is recognised in the statement of profit and loss in the period of a plan amendment or curtailment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on
curtailments and settlements);

• net interest expense or income; and

• re-measurement

The Company presents the first two components of defined benefit costs in the statement of profit
and loss in the line item employee benefits expense.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit
or surplus in the Company's defined benefit plans. Any surplus resulting from this calculation is
limited to the present value of any economic benefits available in the form of refunds from the
plans or reductions in future contributions to the plans.

d. Other long-term employee benefits

The company has long term employment benefit plans i.e. accumulated leave up to maximum 90
days. Accumulated leave is encashed to eligible employees at the time of retirement. The liability
for accumulated leave, which is a defined benefit scheme, is provided based on actuarial valuation
as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent
actuary.

2.11 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 Company will comply with all attached conditions. Government
grants that compensate the Company for expenses incurred are recognised in the statement of profit
and loss, as income or deduction from the relevant expense, on a systematic basis in the periods in
which the expense is recognised. Government grants relating to the purchase of property, plant and
equipment are included in non-current liabilities as deferred income and are credited to Statement of
Profit and Loss on a straight-line basis over the expected lives of the related assets to match them with
the costs for which they are intended to compensate and presented within other income.

2.12 Measurement of fair value
a. Financial instruments

The estimated fair value of the Company's financial instruments is based on market prices and
valuation techniques. Valuations are made with the objective to include relevant factors that
market participants would consider in setting a price, and to apply accepted economic and
financial methodologies for the pricing of financial instruments. References for less active markets
are carefully reviewed to establish relevant and comparable data.

b. Derivatives

The Company uses derivative financial instruments, such as forward currency contracts to hedge
its foreign currency risks. Such derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are subsequently re-measured at
fair value provided by the respective banks. Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising
from changes in the fair value of derivatives are taken directly to statement of profit and loss.

2.13 Financial instruments

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. Financial instruments also include derivative contracts
such as foreign currency foreign exchange forward contracts.

a. Financial Assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the
financial asset. However, trade receivables that do not contain a significant financing component
are measured at transaction price.

Classifications

The company classifies its financial assets as subsequently measured at either amortised cost or
fair value depending on the company's business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets.

Financial Assets measured at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met:

- it is held within a business model whose objective is to hold assets in order to collect contractual
cash flows.

- the contractual terms of the financial assets represent contractual cash flows that are solely
payments of principal and interest.

After initial measurement, such financial assets are subsequently measured at amortised cost using
the Effective Interest Rate ('EIR') method. Amortised 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
amortisation is included as finance income in the Statement of Profit & Loss. The losses arising from
impairment are recognised in the Statement of Profit & Loss.

Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit loss associated with its
assets carried at amortised cost and FVTOCI debt instruments. The impairment methodology
applied depends on whether there has been a significant increase in credit risk.

With regard to trade receivable, the Company applies the simplified approach as permitted by Ind
AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the
initial recognition of the trade receivables.

De-recognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the Company's balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under
a 'pass-through' arrangement; and either (a) the Company has transferred substantially all
the risks and rewards of the asset, or (b) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks
and rewards of the asset, nor transferred control of the asset, the Company continues to recognize
the transferred asset to the extent of the Company's continuing involvement. In that case, the
Company also recognizes an associated liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration
that the Company could be required to repay.

On de-recognition of a financial asset, the difference between the carrying amount of the asset
(or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the
consideration received (including any new asset obtained less any new liability assumed) and (ii)
any cumulative gain or loss that had been recognised in OCI is recognised in the Statement of Profit
& Loss.

b. Financial liabilities

Initial recognition and measurement

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

All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of
directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:
Financial Liabilities measured at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process. Amortised 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 amortisation is included as finance costs in the statement of
profit and loss.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon
initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading
are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied.
For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit
risks are recognized in OCI. These gains/losses are not subsequently transferred to Profit &Loss.
However, the Company may transfer the cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement of profit or loss.

De-recognition of financial liabilities

The company derecognises a financial liability when its contractual obligations are discharged or
cancelled or expired.

2.14 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The board of directors of the Company has been identified as being
the chief operating decision maker by the Management of the company. The Business activity of the
company falls within one business segment viz "Textile".

3. Property, Plant and Equipment
Accounting Policy:

Recognition and measurement

On transition to Ind AS, the Company has elected to continue with the carrying value of all its property
plant and equipment recognized as at 1st April, 2016 measured as per the previous GAAP and use that
carrying value as the deemed cost of the property, plant and equipment.

Items of property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly
attributable cost of bringing the assets to working condition for its intended use including borrowing
cost and incidental expenditure during construction incurred up to the date when the assets are ready
for intended use.

If significant parts of an item of property, plant and equipment have different useful lives, then they
are accounted for as a separate item (major components) of property, plant and equipment. As per the
assessment made by the management, property plant & equipment (other than building and captive
power plant) does not comprise any significant components with different useful life. Any gain on
disposal of property, plant and equipment is recognised in Statement of Profit and loss.

Subsequent Measurement

Subsequent expenditure is capitalised only if it is probable that there is a future economic benefit
associated with the expenditure will flow to the Company and the cost can be measured reliably.

Depreciation

Depreciation on property, plant & equipment is calculated on Straight Line Method using the rates
arrived at based on the estimated useful lives given in Schedule II of the Companies Act, 2013.

Depreciation on additions to or on disposal of assets is calculated on pro-rata basis. Right of use assets is
amortised over the lease period or estimated useful life whichever is less. Additions on rented premises
are being amortised over the period of rent agreement.

Depreciation methods, useful lives and residual values are reviewed in each financial year end and
changes, if any, are accounted for prospectively. The management believes that these estimated useful
lives are realistic and reflect fair approximation of the period over which the assets are likely to be
used.

De-recognition

An item of property, plant and equipment is de-recognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the
disposal or retirement of an item of property, plant and equipment is determined as the difference
between net disposal proceeds and the carrying amount of the asset and is recognised in the Statement
of Profit & Loss.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance
Sheet date is classified as 'Capital Advances' under 'Other Non-current Assets'.

(a) Includes Carrying Value of Land Rs. 2.42 Lakhs (Previous Year: Rs. 2.42 Lakhs) held by the company
since 21st February, 1994 for which registration is pending and Title deed held in the name of others
(Other than promoter, director or relative of promoter/director or employee of promoter/ director).

(b) Includes gross carrying value of Building Rs. 625.49 Lakhs for which possession held by the company
w.e.f 22nd October, 2022 for which registration of Title deed is pending due to statutory compliance of
the Real Estate Devloper.

(c) Property, Plant & Equipment given as security for borrowings refer note 21

# During the previous year ended March 31, 2025, a fire occurred at the Company's Guna Unit resulting
in damage to certain items of Plant and Equipment. As a result, net carrying value of Rs. 6.13 Lakhs were
written off in the books of accounts and charged as loss in the Statement of Profit and Loss under the
head Profit (Loss) on Sale/Discrad of Property, Plant and Equipment.

3A' 1. Accounting Policy:

Capital work-in-progress comprises of assets in the course of construction for production or/and supply
of goods or services or administrative purposes, are carried at cost, less any recognised impairment
loss. At the point when an asset is operating at management's intended use, the cost of construction
is transferred to the appropriate category of property, plant and equipment. Costs associated with the
commissioning of an asset are capitalised where the asset is available for use and commissioning has
been completed.

4. Right of use assets (Refer Note 39)

Accounting Policy:

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership of an underlying asset.

The Company as lessor

Leases for which the Company is a lessor is classified as finance or operating leases. Whenever the terms
of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is
classified as finance lease.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Company as lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The
Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term
of 12 months or less) and leases of low value assets. For these leases, the Company recognises the
lease payments as an operating expense on a straight-line basis over the lease term, unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased
assets are consumed. Contingent and variable rentals are recognized as expense in the periods in
which they are incurred.

Right of Use (ROU) Assets

The ROU assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day and any initial direct costs. They are subsequently measured
at cost less accumulated depreciation and impairment losses.

Whenever the company incurs an obligation for costs to dismantle and remove a leased asset, restore
the site on which it is located or restore the underlying asset to the condition required by the terms and
conditions of the lease, a provision is recognised and measured under Ind AS 37- Provisions, Contingent
Liabilities and Contingent Assets. The costs are included in the related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term and useful life of the underlying
asset. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life. The depreciation starts at the commencement date
of the lease.

The Company applies Ind AS 36- Impairment of Assets to determine whether a right-of-use asset is
impaired and accounts for any identified impairment loss as per its accounting policy on 'property,
plant and equipment'.

As a practical expedient, Ind AS 116 permits a lessee not to separate non-lease components when
bifurcation of the payments is not available between the two components, and instead account for
any lease and associated non-lease components as a single arrangement. The Company has used this
practical expedient.

Extension and termination options are included in many of the leases. In determining the lease term
the management considers all facts and circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option.

5. Intangible Assets

Accounting Policy:

Intangible assets have a finite useful life and are stated of cost less accumulated amortisation and
accumulated impairment losses, if any. Intangible assets are amortized on straight line method basis
over the estimated useful life. Estimated useful life of the Software is considered as 5 years. Amortisation
methods, useful lives and residual values are reviewed in each financial year end and changes, if any,
are accounted for prospectively.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected
from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the
difference between the net disposal proceeds and the carrying amount of the asset are recognised in
the statement of profit and loss when the asset is derecognised. Intangible assets with indefinite useful
lives and intangible assets not yet available for use are tested for impairment annually, and whenever
there is an indication that the asset may be impaired, impairment loss is recognised in the statement of
profit & loss.