K. Provisions, Contingent Liabilities and Contingent Assets

(i) Provisions involving substantial degree of estimation in measurement are recognised
when there is a present obligation as a result of past events and it is probable that
there will be an outflow of resources embodying economic benefits in respect of
which a reliable estimate can be made.

(ii) Provisions are discounted if the effect of the time value of money is material, using
pre-tax rates that reflects the risks specific to the liability. When discounting is used,
an increase in the provisions due to the passage of time is recognised as finance
cost. These provisions are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates.

(iii) Insurance claims are accounted on the basis of claims admitted or expected to be
admitted and to the extent that the amount recoverable can be measured reliably and
it is reasonable to expect ultimate collection. Any subsequent change in the
recoverability is provided for. Contingent Assets are not recognised.

(iv) Contingent liability is a possible obligation that may arise from past events and its
existence will be confirmed only by occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or it is not
probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and the same are not recognised but disclosed in the financial
statements.

L. Intangible Assets

(i) The costs of computer software acquired and its subsequent improvements are
capitalised. Internally generated software is not capitalized and the expenditure is
recognized in the Statement of Profit and Loss in the year in which the expenditure
is incurred.

(ii) The cost incurred for right to un-restricted usage of power transmission system for
drawal of power from State grid to its mills were capitalized as the Company is
expected to yield future economic benefits.

(iii) The useful lives of intangible assets are assessed as either finite or indefinite. Intangible
Assets with finite lives are carried at cost less accumulated amortisation and impairment
losses if any and are amortised over their estimated useful life based on straight-line
method. The Company do not have any intangible assets with indefinite lives.

(iv) The intangible assets that are under development phase are carried at cost including
related expenses and attributable interest, and are recognised as Intangible assets
under development.

(v) The residual values, useful lives and methods of amortisation of intangible asset are
reviewed at each reporting date and adjusted prospectively, if appropriate.

M. Investment Properties

(i) An investment in land or buildings both furnished and unfurnished, which are held
for earning rentals or capital appreciation or both rather than for use in the production
or supply of goods or services or for administrative purposes or sale in the ordinary
course of business, are classified as investment properties.

(ii) Investment properties are stated at cost, net of accumulated depreciation and
impairment loss, if any except freehold land, which is carried at cost.

(iii) The Company identifies the significant parts of investment properties separately, which
are required to be replaced at intervals. Such parts are depreciated separately based
on their specific useful lives determined on best estimate basis upon technical advice.

(iv) Depreciation on investment properties are calculated on straight-line method based
on useful life of the significant parts as detailed below, that are different from the
useful lives as indicated under Part C of Schedule II of the Companies Act, 2013:

(v) The residual values, useful lives and methods of depreciation of investment properties
are reviewed at each reporting date and adjusted prospectively, if appropriate.

N. Operating Segments

(i) Operating segments are identified on the basis of nature and usage of products and
reported in a manner consistent with the internal reporting provided to Chief Operating
Decision Maker. The Company's business operation comprises of two operating
segments viz., Textile and Windmills.

(i) The Company initially determines the classification of financial assets and liabilities.
After initial recognition, no re-classification is made for financial assets, which are
categorised as equity instruments at FVTOCI, and financial assets / liabilities that are
specifically designated as FVTPL. However, other financial assets are re-classifiable
when there is a change in the business model of the Company.

(ii) Fair Value Hedge

Changes in the fair value of forwards contracts that are designated and qualify as
fair value hedges are recognized in the income statement, together with the changes
in the fair value of the hedged item that are attributable to the hedged risk. If the
hedge no longer meets the criteria for hedge accounting, changes in the fair value
of the hedged item attributable to the hedged risk are no longer recognized in the
income statement.

When a hedged item in a fair value hedge is a firm commitment (or a component
thereof) to acquire an asset or assume a liability, the initial carrying amount of the
asset or the liability that results from the entity meeting the firm commitment is
adjusted to include the cumulative change in the fair value of the hedged item that
was recognised in the balance sheet, with a corresponding gain or loss recognized
in Profit or Loss.

Financial Assets

(iii) Financial assets comprise of investments in equity, loans, trade receivables, cash
and cash equivalents and other financial assets.

Initial recognition and measurement

(iv) 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 (FVTPL), transaction costs that are
attributable to the acquisition of the financial asset.

(v) Where the fair value of a financial asset at initial recognition is different from its
transaction price, the difference between the fair value and the transaction price is
recognised as a gain or loss in the Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted market price in an active market for
an identical asset (i.e. level 1 input) or through a valuation technique that uses data
from observable markets (i.e. level 2 input).

(vi) In case the fair value is not determined using a level 1 or level 2 input as mentioned
above, the difference between the fair value and transaction price is deferred

appropriately and recognised as a gain or loss in the Statement of Profit and Loss
only to the extent that such gain or loss arises due to a change in factor that market
participants take into account when pricing the financial asset.

Subsequent measurement

(vi) For subsequent measurement, the Company classifies a financial asset in accordance
with the below criteria:

(a) The Company’s business model for managing the financial asset and,

(b) The contractual cash flow characteristics of the financial asset:

Based on the above criteria, the Company classifies its financial assets into the
following categories:

(viii) The Company has accounted for its investments in associates at cost.

(ix) For impairment purposes, significant financial assets are tested on individual basis
at each reporting date. Other financial assets are assessed collectively in groups that

(x) Financial liabilities comprise of Borrowings, Trade payables, Lease Liabilities and
other financial liabilities.

Initial recognition and measurement:

(xi) All financial liabilities are recognised initially at fair value minus, in the case of
financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the financial liability.

(xii) Where the fair value of a financial liability at initial recognition is different from its
transaction price, the difference between the fair value and the transaction price is
recognised as a gain or loss in the Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted market price in an active market for
an identical asset (i.e. level 1 input) or through a valuation technique that uses data
from observable markets (i.e. level 2 input).

(xiii) In case the fair value is not determined using a level 1 or level 2 input as mentioned
above, the difference between the fair value and transaction price is deferred
appropriately and recognised as a gain or loss in the Statement of Profit and Loss
only to the extent that such gain or loss arises due to a change in factor that market
participants take into account when pricing the financial liability.

Subsequent measurement

(xiv) All financial liabilities of the Company are subsequently measured at amortised cost
using the effective interest method except for certain items like foreign exchange
forward contracts that do not qualify for hedge accounting are measured at fair
through profit or loss (FVTPL).

(xv) Transaction cost of financial guarantee contracts that are directly attributable to the
issuance of the guarantee are recognised initially as a liability at fair value.
Subsequently, the liability is measured at the higher of the amount of loss allowance
determined as per impairment requirements of Ind AS 109 and the amount recognised
less cumulative amortization.

P. Fair value measurement

(i) The fair value of an asset or a liability is measured using the assumptions that the
market participants would use when pricing the asset or liability, assuming that the
market participants act in the economic best interest.

(ii) All assets and liabilities for which fair value is measured and disclosed in the financial
statements are categorised within fair value hierarchy based on the lowest level input
that is significant to the fair value measurement as a whole. The fair value hierarchy
is described as below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level inputs that are significant to
the fair value measurement is directly or indirectly observable.

Level 3: Valuation techniques for which the lowest level inputs that are significant to
the fair value measurement is unobservable.

(iii) For assets and liabilities that are recognised in the Balance sheet on a recurring
basis, the company determines whether transfers have occurred between levels in
the hierarchy by reassessing categorisation at the end of each reporting period (i.e)
based on the lowest level input that is significant to the fair value measurement as
a whole.

(iv) For the purpose of fair value disclosures, the company has determined the classes
of assets and liabilities based on the nature, characteristics and risks of the assets
or liabilities and the level of the fair value hierarchy as explained above.

6. Significant Estimates and Judgements

The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities
and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results
could vary from these estimates. The estimates and underlying assumptions are reviewed on
an on-going basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision effects only that period or in the period of the revision
or future periods, if the revision affects both current and future years.

Accordingly, the management has applied the following estimates / assumptions / judgements
in preparation and presentation of financial statements:

(i) Revenue Recognition

Significant management judgement is exercised in determining the transaction price and
discounts to customer, which is based on market factors namely demand and supply.
The Company offers credit period to customers and management judgment is exercised
in assessing whether a contract contains a significant financing component.

(ii) Property, Plant and Equipment, Intangible Assets and Investment Properties

The residual values and estimated useful life of PPEs, Intangible Assets and Investment
Properties are assessed by the technical team at each reporting date by taking into
account the nature of asset, the estimated usage of the asset, the operating condition of
the asset, past history of replacement and maintenance support. Upon review, the
management accepts the assigned useful life and residual value for computation of
depreciation / amortisation. Also, management judgement is exercised for classifying the
asset as investment properties or vice versa.

(iii) Current Taxes

Calculations of income taxes for the current period are done based on applicable tax laws
under new tax regime and management's judgement by evaluating positions taken in tax
returns and interpretations of relevant provisions of law and applicable judicial precedents.

(iv) Deferred Tax Asset

Significant management judgement is exercised by reviewing the deferred tax assets at each
reporting date to determine the amount of deferred tax assets that can be retained / recognised,
based upon the likely timing and the level of future taxable profits together with future tax
planning strategies.

(v) Provisions

The timing of recognition requires application of judgement to existing facts and
circumstances that may be subject to change. The litigations and claims to which the
company is exposed are assessed by the management and in certain cases with the
support of external experts. The amounts are determined by discounting the expected
future cash flows at a pre-tax rate that reflects the current market assessments of the time
value of money and the risks specific to the liability.

(vi) Segment Reporting

Management's judgment is exercised to aggregate two or more business segments as
single operating segment, based on economic characteristics, products, production process
and types of customer, which are similar in nature.

(vii) Contingent Liabilities

Management judgement is exercised for estimating the possible outflow of resources, if
any, in respect of contingencies / claims / litigations against the Company as it is not
possible to predict the outcome of pending matters with accuracy.

(viii) Classification of Investment

Management judgement is exercised in determining the following criteria while making
classification of investments:

- the intention of the Company to sell the investment immediately;

- the sale is highly probable;

- it is unlikely that significant change to the sale plan will be made and;

- that plan will not be withdrawn.

Based on this judgement, the investments are classified as "Investment held for sale", if
all the above criteria are met and continue to classify the investment as "Non-current
investment", if the above criteria are not met.

(ix) Impairment of Trade receivables

The impairment for trade receivables are done based on assumptions about risk of
default and expected loss rates. The assumptions, selection of inputs for calculation of
impairment are based on management judgement considering the past history, market
conditions and forward looking estimates at the end of each reporting date.

(x) Impairment of Non-financial assets (PPE / Intangible Assets / Investment Properties)

The impairment of non-financial assets is determined based on estimation of recoverable
amount of such assets. The assumptions used in computing the recoverable amount are
based on management judgement considering the timing of future cash flows, discount
rates and the risks specific to the asset.

(xi) Impairment of Investments in Associates

Significant management judgement is exercised in determining whether the investment in
associates are impaired or not is on the basis of its nature of long term strategic investments
and business projections.

(xii) Defined Benefit Plans and Other long term benefits

The cost of the defined benefit plan and other long-term benefits, and the present value
of such obligation are determined by the independent actuarial valuer. An actuarial valuation
involves making various assumptions that may differ from actual developments in future.
Management believes that the assumptions used by the actuary in determination of the
discount rate, future salary increases, mortality rates and attrition rates are reasonable.
Due to the complexities involved in the valuation and its long-term nature, this obligation
is highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date.

(xiii) Determination of lease term of contracts as non-cancellable term

Significant management judgement is exercised in determining the lease term as non¬
cancellable term of the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods covered by an option
to terminate the lease, if it is reasonably certain not to be exercised, by considering all
relevant factors that create an economic incentive for it to exercise either the renewal or
termination.

(xiv) Fair value measurement of financial instruments / Firm Commitments

When the fair values of financial assets and financial liabilities could not be measured
based on quoted prices in active markets, management uses valuation techniques including
the Discounted Cash Flow (DCF) model, to determine its fair value The inputs to these
models are taken from observable markets where possible, but where this is not feasible,
a degree of judgement is exercised in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility.

(xv) Interests in other entities

Significant management judgement is exercised in determining the interests in other
entities. The management believes that wherever there is a significant influence over
certain companies belonging to its group, such companies are treated as Associate
companies even though it holds less than 20% of the voting rights.