C. MATERIAL ACCOUNTING POLICIES

1. Foreign currency transactions and balances

Transactions in foreign currencies are initially recognized in
the Standalone financial statements using exchange rates
prevailing on the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are translated
to the relevant functional currency at the exchange rates
prevailing at the reporting date. Non-monetary assets
and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional
currency at the exchange rate prevailing on the date that
the fair value was determined. Non-monetary assets and

liabilities denominated in a foreign currency and measured at
historical cost are translated at the exchange rate prevalent
at the date of transaction. Foreign currency differences
arising on translation are recognized in the Statement of
Profit and Loss for determination of net profit or loss during
the period.

2. Financial Instruments

a. Financial Assets

(i) Classification of financial assets

The Company classifies its financial assets in the following
measurement categories:

• those to be measured subsequently at fair value (either
through other comprehensive income, or through profit
or loss), and

• those measured at amortised cost.

The classification depends on the entity’s business model for
managing the financial assets, the contractual terms of the
cash flows and whether the investment meets the definition of
interest in associates and joint ventures. For assets measured
at fair value, gains and losses will either be recorded in profit
or loss or other comprehensive income. For investments in
debt instruments, this will depend on the business model
in which the investment is held. For investments in equity
instruments, this will depend on whether the Company has
made an irrevocable election at the time of initial recognition
to account for the equity investment at fair value through
other comprehensive income. The Company reclassifies debt
investments when and only when its business model for
managing those assets changes. Investments forming part
of interest in associates and joint ventures are measured at
cost.

(ii) Measurements:

At initial recognition, the Company measures a financial
asset at its fair value plus, except for trade receivables
which are initially measured at transaction price. 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.

- Debt instruments

Subsequent measurement of debt instruments depends on
the Company’s business model for managing the asset and
the cash flow characteristics of the asset. There are two
measurement categories into which the Company classifies
its debt instruments:

a) Amortised 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
amortised cost. A gain or loss on a debt investment that
is subsequently measured at amortised cost and is not
part of a hedging relationship is recognised in profit or
loss when the asset is derecognised or impaired. Interest
income from these financial assets is included in other
income using the effective interest rate method.

b) Fair value through profit or loss: Assets that do not meet
the criteria for amortised cost or Fair value through
other comprehensive income are measured at fair value
through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through
profit or loss and is not part of a hedging relationship
is recognised in profit or loss and presented net in the
statement of profit and loss within other income/ other
expenses in the period in which it arises. Interest income
from these financial assets is included in other income.

- Investment in subsidiaries

Investments in subsidiaries are carried at cost less
accumulated impairment losses, if any in the standalone
financial statements. Where an indication of impairment
exists, the carrying amount of investment is assessed and
written down immediately to its recoverable amount.

- Equity instruments

The Company subsequently measures all equity investments
other than investments forming part of interest in associates
and joint ventures at fair value. Where the Company’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gains
and losses to profit or loss. Dividends from such investments
are recognised in profit or loss as other income when the
Company’s right to receive payments is established. Changes
in the fair value of financial assets at fair value through profit
or loss are recognised in other income/ other expenses in the
statement of profit and loss. Impairment losses (and reversal

of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair
value.

(iii) Impairment of financial assets:

The Company assesses on a forward-looking basis the
expected credit losses associated with its assets carried
at cost and amortised cost. The impairment methodology
applied depends on whether there has been a significant
increase in credit risk. Refer notes to accounts for the details
how the Company determines whether there has been a
significant increase in credit risk.

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

(iv) Derecognition of financial assets:

A financial asset is derecognised only when

a) The Company has transferred the rights to receive cash
flows from the financial asset 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 transferred an asset, the Company
evaluates whether it has transferred substantially all risks
and rewards of ownership of the financial asset. In such cases,
the financial asset is derecognised. Where the entity has not
transferred substantially all risks and rewards of ownership
of the financial asset, the financial asset is not derecognised.

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.

(v) Income recognition
a) Interest income

Interest income from debt instruments is recognised
using the effective interest rate method. The effective

interest rate is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to the gross carrying amount
of a financial asset. When calculating the effective
interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of
the financial instrument (for example: prepayment,
extension, call and similar options) but does not
consider the expected credit losses.

b) Dividends

Dividends are recognised in profit or loss only when
the right to receive payment is established, it is
probable that the economic benefits associated
with the dividend will flow to the Company, and the
amount of the dividend can be measured reliably.

b. Financial liabilities

Initial recognition and measurement:

Financial liabilities are initially recognised at fair value plus
any transaction cost that are attributable to the acquisition
of the financial liabilities except financial liabilities at fair
value through profit or loss which are initially measured at
fair value.

Subsequent measurement:

The financial liabilities are classified for subsequent
measurement into following categories:

- at amortised cost

- at fair value through profit or loss

(i) Financial liabilities at amortised cost

The company is classifying the following under amortised
cost.

a) Borrowings from banks

b) Borrowings from others

c) Finance lease liabilities

d) Trade payables

e) Other financial liabilities

Amortised cost for financial liabilities represents amount at
which financial liability is measured at initial recognition
minus the principal repayments, plus or minus the cumulative

amortisation using the effective interest method of any
difference between that initial amount and the maturity
amount.

(ii) Financial liabilities at fair value through profit or loss

A financial liability is classified as at FVTPL if it is classified as
held for trading. Financial liabilities at FVTPL are measured
at fair value and net gains and losses, including any interest
expense, are recognised in profit and loss.

Derecognition of financial liabilities:

A financial liability shall be derecognised when, and only
when, it is extinguished i.e., when the obligation specified in
the contract is discharged or cancelled or expires.

c. Derivative financial instruments

Derivatives are initially recognised at fair value on the date
of contract is entered into and are subsequently re-measured
to their fair value at the end of each reporting period. The
accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument,
and if so, the nature of the item being hedged and the type
of hedge relationship designated.

The Company designates the derivatives as hedging of foreign
exchange risk associated with the cash flows of associated
with accounting receivables (Cash flow hedges).

The Company documents at the inception of the hedging
transaction the economic relationship between hedging
instruments and hedged items including whether the hedging
instrument is expected to offset changes in cash flows of
hedged items. The Company documents its risk management
objective and strategy for undertaking various hedge
transactions at the inception of each hedge relationship.

The full fair value of a hedging derivative is classified as non¬
current assets or liability when the remaining maturity of
the hedged item is more than 12 months; it is classified as a
current assets or liability when the remaining maturity of the
hedged item is less than 12 months. Trading derivatives are
classified as current assets or liability.

Cash flow hedges

The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedge is recognised in the other comprehensive income
in cash flow hedging reserve within equity, limited to the

cumulative changes in fair value of the hedged item on
present value basis from the inception of the hedge. The
gain or loss relating to the ineffective portion is recognised
immediately in profit or loss, within other gains/ (losses).

When option contracts are used to hedge forecast transactions,
the Company designates only the intrinsic value of the option
contract as the hedging instrument.

Gains or losses relating to the effective portion of the change
in intrinsic value of the option contracts are recognised in
the cash flow hedging reserve within equity. The changes in
the time value of the option contracts that relate to the
hedged item (‘aligned time value’) are recognised within
other comprehensive income in the costs of hedging reserve
within equity.

When forward contracts are used to hedge forecast
transactions, the Company generally designates only the
changes in fair value of the forward contract related to
spot commitment as the hedging instrument. Gains or losses
relating to the effective portion of the changes in the spot
component of the forward contracts are recognised in other
comprehensive income in the cash flow hedging reserve
within equity. The changes in the forward element of the
contract that relates to the hedged item (‘aligned forward
element’) is recognised within other comprehensive income
in the costs of hedging reserve within equity. In some cases,
the entity may designate the full changes in fair value of the
forward contract (including forward points) as the hedging
instrument. In such cases, the gains or losses relating to
effective portion of the changes in fair value of the entire
forward contract are recognised in the cash flow hedging
reserve within equity.

Amounts accumulated in equity are classified to profit or loss
in the periods when the hedged item affects profit or loss
(example, when the forecast sale that is hedged take place).

When the hedged forecast transaction results in the
recognition of a non-financial assets (for example inventory),
the amounts accumulated in equity are transferred to profit
or loss as follows:

• With respect to gain or loss relating to the effective portion
of the intrinsic value of the option contracts, both the
deferred hedging gains and losses and the deferred aligned
time value of the option contracts are included within the
initial cost of the assets. The deferred amounts are ultimately

recognised in profit or loss as the hedged item affects profit
or loss (for example, through cost of sales).

• With respect to gain or loss relating to the effective portion
of the spot component of the forward contracts, both the
deferred hedging gains and losses and the deferred aligned
forward points are included within the initial cost of the
assets. The deferred amounts are ultimately recognised in
profit or loss as the hedged item affects profit or loss (for
example, through cost of sales).

When a hedging instrument expires, or is sold or terminated,
or when a hedge no longer meets the criteria for hedge
accounting, any cumulative deferred gain or loss and deferred
costs of hedging in equity at that time remains in equity
until the forecast transaction occurs. When the forecast
transaction is no longer expected to occur, the cumulative
gain or loss and deferred cost of hedging that were reported
in equity are immediately reclassified to profit or loss within
other gains/ (losses).

If the hedge ratio for risk management purpose is no
longer optimal but the risk management objective remains
unchanged and the hedge continues to qualify for hedge
accounting, the hedge relationship will be rebalanced by
adjusting either the volume of the hedging instrument or the
volume of the hedged item so that the hedged ratio aligns
with the ratio used for risk management purposes. Any hedge
ineffectiveness is calculated and accounted for in profit or
loss at the time of hedge relationship rebalancing.

d. Offsetting of financial assets and financial liabilities

Financial assets and liabilities are offset and the net amount
is presented in the statement of financial position when,
and only when, the Company has a legal right to offset the
recognised amounts and intends either to settle on a net basis
or to realize the assets and settle the liability simultaneously.

e. Reclassification of financial assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
categorised as equity instruments at FVTOCI and financial
assets or liabilities that are specifically designated as
FVTPL. For financial assets which are debt instruments,
a reclassification is made only if there is a change in the
business model for managing those assets. Changes to the
business model are expected to be very infrequent. The

management determines change in the business model as a
result of external or internal changes which are significant
to the Company’s operations. A change in the business model
occurs when the Company either begins or ceases to perform
an activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first
day of the immediately next reporting period following the
change in business model. The Company does not restate any
previously recognised gains, losses (including impairment
gains or losses) or interest.

3. Share capital

Ordinary shares are classified as Equity. Incremental costs
directly attributable to the issue of new ordinary shares or
share options are recognized as a deduction from Equity, net
of any tax effects.

4. Property, Plant and Equipment

Property, Plant and Equipment is stated at cost less
accumulated depreciation and where applicable accumulated
impairment losses. Cost includes expenditure that is directly
attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials, direct
labour and any other costs directly attributable to bringing
the asset to a working condition for its intended use, and the
costs of dismantling and removing the items and restoring
the site on which they are located. Purchased software that
is integral to the functionality of the related equipment is
capitalized as part of that equipment.

When parts of an item of Property, Plant and Equipment have
different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.

Amounts paid as advances towards the acquisition of
Property, Plant and Equipment is disclosed separately under
other non-current assets as capital advances and the cost of
assets not put to use as on Balance Sheet date are disclosed
under “Capital work-in-progress’.

Gains and losses on disposal of an item of Property, Plant
and Equipment are determined by comparing the proceeds
from disposal with the carrying amount of Property, Plant
and Equipment and are recognized net within “other income
/ other expenses” in the Statement of Profit and Loss.

Subsequent costs

The cost of replacing part of an item of property, plant and
equipment is recognized in the carrying amount of the item
if it is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can
be measured reliably. The carrying amount of the replaced
part is de-recognized. The costs of the day-to-day servicing
of property, plant and equipment are recognized in the
Statement of Profit or Loss.

Depreciation

Depreciation is recognized in the Statement of profit and
loss on a straight-line basis over the estimated useful lives
of each part of an item of property, plant and equipment.
Leased assets are depreciated over the shorter of the lease
term and their useful lives unless it is reasonably certain that
the Company will obtain ownership by the end of the lease
term. Management’s estimated useful lives for the years
ended March 31, 2025 and 2024 were as follows:

The depreciation method, useful lives and residual value are
reviewed at each of the reporting date.

5. Intangible assets

Intangible assets that are acquired by the Company,
which have finite useful lives, are measured at cost less
accumulated amortization and accumulated impairment
losses. Cost includes expenditure that is directly attributable
to the acquisition of the intangible asset.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases
the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including
expenditure on internally generated goodwill and brands,
are recognized in profit or loss as incurred.

Amortization of intangible assets with finite useful lives

Amortization is recognized in profit or loss on a straight-line
basis over the estimated useful lives of intangible assets
from the date that they are available for use. The estimated
useful lives for the current and previous year are as follows:

Trademark -10 years

Other Intangibles (Software) - 3 - 5 years

Non-compete fees - 10 years

Amortization methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.

6. Leases

The Company as a lessee

The Company’s lease asset classes primarily consist of leases
for land and buildings. The company assesses whether
a contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified
asset, the company assesses whether: (1) the contract
involves the use of an identified asset (2) the company has
substantially all of the economic benefits from use of the
asset through the period of the lease and (3) the company
has the right to direct the use of the asset.

At the date of commencement of the lease, the Company
recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of twelve months or
less (short-term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis
over the term of the lease.

Certain lease arrangements include the options to extend or
terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is
reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. Right of use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets.

The lease liability is initially measured at amortized cost at
the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit
in the lease or, if not readily determinable, using the
incremental borrowing rates in the country of domicile of the
leases. Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the company
changes its assessment if whether it will exercise an extension
or a termination option.

Lease liability and ROU asset have been separately presented
in the Balance Sheet and lease payments have been classified
as financing cash flows.

7. Inventories

Inventories are valued at the lower of cost and the net
realisable value after providing for obsolescence and other
losses, where considered necessary. Cost includes all charges
in bringing the goods to the point of sale, including octroi
and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include appropriate
proportion of overheads.

The Company follows following method:

• Manufacturing inventories are valued at first-in-first-out
(FIFO) basis,

• Trading inventories are valued at weighted average cost
basis,

• Fabric waste is valued at net realizable value.

8. Impairment of non financial assets

The carrying values of assets / cash generating units at
each balance sheet date are reviewed for impairment if any
indication of impairment exists. The following intangible
assets are tested for impairment each financial year even if
there is no indication that the asset is impaired:

(a) an intangible asset that is not yet available for use; and (b)
an intangible asset that is amortised over a period exceeding
ten years from the date when the asset is available for use.

If the carrying amount of the assets exceed the estimated
recoverable amount, an impairment is recognised for such
excess amount. The impairment loss is recognised as an
expense in the Statement of Profit and Loss, unless the asset
is carried at revalued amount, in which case any impairment
loss of the revalued asset is treated as a revaluation decrease
to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling
price and their value in use. Value in use is arrived at by
discounting the future cash flows to their present value
based on an appropriate discount factor.

Reversal of impairment loss

When there is indication that an impairment loss recognised
for an asset (other than a revalued asset) in earlier accounting
periods no longer exists or may have decreased, such reversal
of impairment loss is recognised in the Statement of Profit
and Loss, to the extent the amount was previously charged
to the Statement of Profit and Loss. In case of revalued assets
such reversal is not recognised.

9. Employee benefits
Defined Contribution Plans

The Company’s contribution to provident fund and employee
state insurance scheme are considered as defined contribution
plans and are charged as an expense based on the amount
of contribution required to be made and when services are
rendered by the employees.

Defined Benefit Plan

Gratuity

In accordance with the Payment of Gratuity Act, 1972,
the Company provides for a lump sum payment to eligible

employees, at retirement or termination of employment
based on the last drawn salary and years of employment
with the Company. The gratuity fund is managed by the Life
Insurance Corporation of India (LIC). The Company’s net
obligation in respect of defined benefit plan is calculated by
estimating the amount of future benefit that employees have
earned in current and prior periods, discounting that amount
and deducting any recognised past service cost and fair value
of any plan assets.

Other long-term employee benefit obligations

The liabilities for earned leave and sick leave are not
expected to be settled wholly within 12 months after the
end of the reporting period in which the employees render
the related service. They are therefore measured as the
present value of expected future payments to be made in
respect of services provided by employees up to the end of
the reporting period using the projected unit credit method.
The benefits are discounted using the market yields at the
end of the reporting period that have terms approximating
to the terms of the related obligation. Remeasurement as a
result of experience adjustments and changes in actuarial
assumptions are recognised in profit or loss.

The obligations are presented as current liabilities in the
balance sheet if the entity does not have an unconditional
right to defer settlement for at least 12 months after the
reporting period, regardless of when the actual settlement is
expected to occur.

Short Term Employee Benefits

The undiscounted amount of short-term employee benefits
expected to be paid in exchange for the services rendered
by employees are recognised during the year when the
employees render the service. These benefits include
performance incentive and compensated absences which are
expected to occur within twelve months after the end of the
period in which the employee renders the related service.

10. Share based payments

Stock options are granted to the employees under the
Employee stock option scheme. The costs of stock options
granted to the employees of the Company are measured at
the fair value of the equity instruments granted. For each
stock option, the measurement of fair value is performed on
the grant date. That expense is recognised in the Statement

of Profit and Loss account over the requisite service period.
Each part of the stock option that vests separately is treated
as a separate award for accounting purposes. This cost is
recognised, together with a corresponding increase in Share
options outstanding account in equity, over the period in
which the performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative expense
recognised for equity-settled transactions at each reporting
date until the vesting date reflects the extent to which the
vesting period has expired and the Company’s best estimate
of the number of equity instruments that will ultimately vest.