n) Provisions, contingent liabilities and contingent assets

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of obligation. A contingent liability is recognized for:

i. a present obligation that arises from past events but is not recognized as a provision because either the possibility that an
outflow of resources embodying economic benefits will be required to settle the obligation is remote or a reliable estimate
of the amount of the obligation cannot be made; and

ii. a possible obligation that arises from past events and 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. Contingent assets
are neither accounted for nor disclosed in the financial statements.

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 recognised as a finance cost.

o) Earning per share

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings
per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares
outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

p) Cash and cash equivalents

Cash and cash equivalents comprises cash at bank and in hand, including offsetting bank overdrafts, and short-term highly
liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in
fair value and have a maturity of three months or less from the acquisition date.

q) Segment Reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal
organisation and management structure. The operating segments are the segments for which separate financial information
is available and for which operating profit/loss amounts are evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating Decision Maker. Chief Operating Decision Maker reviews the
performance according to the nature of products manufactured with each segment representing a strategic business unit
that offers different products and serves different markets. The analysis of geographical segments is based on the locations
of customers.

The company has deferred tax liability till the end of the current year on account of differences arising between carrying cost
of fixed assets as per books of accounts and that as per income tax. However, deferred tax assets are much higher than the
deferred tax liability. In view of this, no further deferred tax assets are being recognised as at March 31, 2025. Based on the
company's virtual certainty of the profit, the company is carrying a deferred tax asset of Rs. 5,016.18 lakh as on March 31, 2025.
Further despite the net worth being eroded the mangement is taking all due steps to revive the company. Therefore the financial
statements have been prepared on going concern basis.

Note:

a) Out of total shares held by promoters and promoter group (i.e.15,70,22,910), 10,93,12,020 equity shares (face value of
Re. 1 each) are pledged in favour of Banks / financial institution.

b) During the current year, 8,00,00,000 shares of Re.1 each have been alloted on conversion of 80,00,000 warrants alloted
on preferential share basis to non promoters. Further 8,30,59,434 shares of Re.1 each have been alloted on rights basis.
Furthermore, during the last Quarter of the FY 2025, 7,24,50,000 share warrants have been issued to an entity falling
under Promoter Group as per Reg. 2(1)(pp) of SEBI (ICDR) Regulations, 2015. Out of this, 2,29,25,000 equity shares
of Re. 1 each have been allotted on conversion of 2,29,25,000 warrants, after receipt of complete amount equivalent to
Warrant Issue Price as required under SEBI (ICDR) Regulations. As on date, 4,95,25,000 convertible warrants stand
pending for conversion according to the terms.

17.2 Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Re. 1 per share. Each shareholder is entitled to one
vote per share.In the event of liquidation of the Company, the equity shareholders will be entitled to receive any of the
remaining assets of the company, after distribution of all preferential amounts.The distribution will be in proportion to
the number of equity shares held by the shareholders. During the year ended 31st March'2025, the amount of dividend
recognized as distribution to equity shareholder was Rs. Nil (Previous year Rs. Nil)

Details of security

a) The lender banks have assigned their respective shares to Phoenix ARC (Sole lender now) through Assignment
Agreements. The Company has accepted/ signed the letter of acceptance (LOA) of Phoenix ARC and the debt is
repayable in monthly installments upto Sep., 2026 as per repayment schedule of LOA. As per the LOA, the liability
will recast to the original amount in case of default. Taking a conservative view, we have not written back the entire
difference between the assigned debt and final payable amount as settled in the LOA. The repayments have been
made as per the repayment schedule except for the delay in the installment of Feb.25 & Mar.25. The total default as
on 31.03.2025 was Rs. 6.43 cr.

b) Borrowings as stated as above are secured by way of equitable mortgage of all the immovable properties (present and
future) of the Company and hypothecation of all movable assets of the company (except book debts).

c) All the borrowings are guaranteed by promoter directors.

d) Further, Borrowings are also secured by hypothecation of all stocks (except the stock of raw material already pledge
with third party), present and future of stores, spare parts, packing materials, raw materials, finished goods, goods in
transit/process, book debts, outstanding money receivable, claims, bills etc. and second charge by way of equitable
mortgage of immovable properties of Company.

45. Financial Risk Management

The principal financial assets of the Company include loans, trade and other receivables, and cash and bank balances that
derive directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade
and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the
management of these risks and that advises on financial risks and the appropriate financial risk governance framework for
the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage
these risks:

Market Risk

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity
risk. Financial instruments affected by market risk include loans & borrowings and deposits. The sensitivity analyses in the
following sections relate to the position as at 31 March 2025 and 31 March 2024.

(i) Foreign Currency risk management

The company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate
fluctuations arise.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily
to the Company's debt obligations with floating interest rates.

As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially
independent of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates
relates primarily to the Company's debt obligations with floating interest rates, which are included in interest bearing loans
and borrowings in these financial statements. The company's fixed rate borrowings are carried at amortised cost. They
are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate
because of a change in market interest rates.

At the reporting date the interest rate profile of the Company's interest bearing financial instrument is at its fair value:

Liquidity Risk

The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.
The Company has outstanding borrowings from Phoenix ARC Private Limited. The Company is passing through a phase of
liquidity stress and there is a mismatch in cash flows. Due to this, the capacities of the Company are running at sub-optimal level.
The Company is working towards devising a plan which would correct the cash flow mismatch. The Company believes that the
Company would be able to generate enough cash inflows to meet its working capital requirements in the medium and long run.
The company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets and liabilities.

Credit Risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the
company. Credit risk has always been managed by the company through credit approvals, establishing credit limits and
continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of
business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain.
The Company has exposure to credit risk from trade receivable balances on sale of Yarns & Readymade Garments. The Company
ensures concentration of credit does not significantly impair the financial assets since the customers to whom the exposure of
credit is taken are well established and reputed industries engaged in their respective field of business. The creditworthiness of
customers to which the Company grants credit in the normal course of the business is monitored regularly.

The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables as disclosed at Note 6 & 10.
Write off policy

The financials assets are written off in case there is no reasonable expectation of recovering from the financial.

46A. Capital Management

The Company's objectives when managing capital is to safeguard the Company’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital. The director's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. No Changes were made in the objectives, policies or processes during the years
ended 31st March 2025 and 31st March 2024.

47 Despite the fact that the net worth of the Company has been fully eroded, the Management is of the view that the company
is an operative company and with all necessary steps and continuing professional management, is confident to turnaround
the company and accordingly Deferred Tax assets will be recognised. In view of the same, the financial statements have
been prepared on going concern basis.

48 The Company is paying rentals for office premises taken on rent which are not in the nature of lease agreements. Therefore,
disclosure requirements of Accounting Standard IND AS-17 are not applicable.

49 The balances of Trade Receivables, Loan and Advances, Deposits and Trade Payables are subject to confirmation/
reconciliation and subsequent adjustments, if any. During the year, letters have been sent to various parties with a request
to confirm their balances as on 31st March, 2025. Except for the provision created against these receivables, they are
realizable as per management of the company.

50 The company operates in two segments: Textiles and Real Estate. Segment reporting disclosures, as required by IND-AS
108 'Operating Segments’, have been provided as follows.

SEGMENT INFORMATION

I Segment accounting policies:

a. Product and Services from which reportable segment derive their revenues (Primary Business Segments)

Based on the nature and class of product and services , their customers and assessment of differential risks and returns
and financial reporting results reviewed by Chief Operating Decision Maker (CODM) , the Group has identified the following
business segments which comprises of.

- Textile Business

- Real Estate

b. Geographical segments (secondary business segments)

The Company operates only in one geographical segment, so no segment reporting has been done based on geographical basis.

c. Segment accounting policies

Segment accounting policies: In addition to the significant accounting policies applicable to the business segment as set
out in note 1, the accounting policies in relation to segment accounting are as under:

i. Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of cash, debtors, inventories, right of
use assets and property, plant and equipment including capital work in progress, net of allowances and provisions, which
are reported as direct offset in the balance sheet. Segment liabilities include all operating liabilities and consist principally of
creditors and accrued liabilities.

ii Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on reasonable basis. All other segment revenue and
expenses are directly attributable to the segments.

iii Inter segment sales:

Inter segment sales are accounted for at cost plus appropriate margin (transfer price) and are eliminated in consolidation.

iv Segment results :

Segment results represent the profit before tax earned by each segment without allocation of central administration costs,
other non operating income as well as finance costs. Operating profit amounts are evaluated regularly by the Chief Operating
Decision Maker in deciding how to allocate resources and in assessing performance.

51 No significant adjusting event occurred between the balance sheet date and date of the approval of the financial statements by the Board
of Directors requiring adjustment or disclosure.

52 Previous year figures have been regrouped /reclassified wherever necessary to conform to current year classification.

53 The Code on Social Security 2020 has been notified in the Official Gazette on 29th September 2020. The effective date from which the
changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted
In the period in which said Code becomes effective and the rules framed thereunder are published.

56 No proceedings have been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

57 The company is not availing any working capital limits from bank(s) and as such, no quarterly returns or statements are
required to be submitted to the bank .

58 The company has not been declared wilful defaulter by any bank or financial Institution or other lenders during the year
ended 31.03.2025.

61 There are no charges or satisfaction yet to be registered with Registrar of Companies/MCA beyond the statutory period.

62 The company has no subsidiary as on 31.03.2025, as such the company is in fully compliance with provisions with respect
to number of layers of companies prescribed under clause (87) of section 2 of the Companies Act read with the Companies
(Restriction on number of Layers) Rules, 2017.

63 During the year, there has not been any Scheme of Arrangements that has been approved by the Competent Authority in
terms of sections 230 to 237 of the Companies Act, 2013.

64 Utilisation of Borrowed funds and share premium:

(A) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources
or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding
(whether recorded in writing or otherwise) that the Intermediary shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries ;

(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the company shall:-

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

65 The company has not used any borrowings from banks and financial institutions for other than the specific purpose for
which it was taken as at the balance sheet date

66 The company has not traded or invested in crypto currency or virtual currency during the financial year.

67 With regard to the provisions of corporatre social responsibiltiy covered under the section 135 of Companies Act, the detail
is as under:

68 There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
Income Tax Act, 1961, that has not been recorded in the books of account.

69 According to the SEBI circular for Disclosure of Large Entity, it is hereby confirmed that Vardhman Polytex Limited is not
a Large Entity. Outstanding borrowing (Long Term) in terms of the said circular was Rs. 17.33 Crores as on 31.03.2025.

70 During the Financial year no amount has been contributed as per section 182 & 183.

As per our report of even date

For Romesh K. Aggarwal & Associates FOR AND ON BEHALF OF BOARD OF DIRECTORS OF VARDHMAN POLYTEX LIMITED

Chartered Accountants

Firm Reg. No:-000711N

Sd/- Sd/- Sd/-

Ruchir Singla Manju Oswal Adish Oswal

Chairman & Managing Director

^{Partner DireCt0r} (DIN-00009710)

Membership No. 519347 (DIN-00009449) iuon ⁰⁰⁰⁰⁹/.^

UDIN- 25519347BMIODK6848

Sd/- Sd/-

Place: Ludhiana Ajay K. Ratra Radhamohan Soni

Date: 30th May 2025 (Company Secretary) (Chief Financial Officer)