1.11 Provisions, Contingent Liabilities and Contingent
Assets:

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources,
that can be reliably estimated, will be required to settle
such an obligation.

If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash
flows to net present value using an appropriate pre-tax
discount rate that reflects current market assessments
of the time value of money and, where appropriate, the
risks specific to the liability. Unwinding of the discount
is recognised in the Statement of Profit and Loss as a
finance cost.

Provisions are reviewed at each reporting date and are
adjusted to reflect the current best estimate.

A present obligation that arises from past events where
it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount
cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a

possible obligation arising from past events, 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.

Claims against the Company where the possibility of
any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.

A contingent asset is disclosed, where an inflow of
economic benefits is probable. Contingent assets are not
recognised in financial statements since this may result
in the recognition of income that may never be realised.
However, when the realisation of income is virtually certain,
then the related asset is not a contingent asset and
is recognised.

1.12 Revenue Recognition:

Revenue is recognised upon transfer of control of promised
products and services to customers, when there are no
longer any unfulfilled obligations, in an amount that reflects
the consideration which the Company expects to receive
in exchange for those products and services.

Revenue towards satisfaction of a performance obligation
is measured at the amount of transaction price (net of
variable consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered is net of variable consideration on
account of allowances, trade, volume & other discounts/
rebates or schemes offered by the Company as part of
the contract and any taxes or duties collected on behalf of
the government such as goods and services tax, etc. This
variable consideration is estimated based on the expected
value of outflow. Revenue (net of variable consideration) is
recognized only to the extent that it is highly probable that
the amount will not be subject to significant reversal when
uncertainty relating to its recognition is resolved.

a) Sale of goods:

Sales of goods are recognised at a point in time upon
transfer of control of promised products to customers,
which coincides with the dispatch or delivery of goods
or upon formal customer acceptance as per the
relevant terms of the contract and when there are no
unfulfilled performance obligations in an amount that
reflects the consideration the Company expect to
receive in exchange for those products.

Accumulated experience and judgement are used
to estimate and provide for turnover discounts,
expected cash discounts, other eligible discounts,
expected returns and incentives.

b) Sale of services:

i) Revenue from services rendered is recognised at
a point in time upon satisfaction of performance

obligations based on agreements arrangements
with the customers. Service income is recorded
net of GST.

ii) In case of Licensing contract which are mainly in
nature of right access, the revenue is recognised
over license period on straight line basis based on
agreements arrangements with the customers.

c) Income from power generation:

Power generation income is recognized on the basis of
electrical units generated and sold in excess of captive
consumption and recognized at prescribed rate as
per agreement of sale of electricity by the Company.
Further, value of electricity generated and captively
consumed is netted off from the electricity expenses.

d) Assets and liabilities arising from right to return:

The Company has contracts with customers which
entitles them the unconditional right to return.

Right to return assets:

A right of return gives the company a contractual right
to recover the goods from a customer (right to return
asset), if the customer exercises its option to return
the goods and obtain a refund. The asset is measured
at the carrying amount of the inventory, less any
expected costs to recover the goods, including any
potential decreases in the value of the returned goods.

Refund liabilities:

A refund liability is the obligation to refund part or all
of the consideration received (or receivable) from the
customer. The Company has therefore recognised
refund liabilities in respect of customer’s right to
return. The liability is measured at the amount the
Company ultimately expects it will have to return to
the customer. The Company updates its estimate of
refund liabilities (and the corresponding change in the
transaction price) at the end of each reporting period.
The Company has presented its right to return assets
and refund liabilities under other current assets and
other current liabilities, respectively.

e) Other income:

i) Interest income in respect of deposits which are
measured at cost is recorded using effective
interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments
or receipts over the expected life of the
financial instrument or a shorter period, where
appropriate, to the gross carrying amount of
the financial asset or to the amortised cost of a
financial liability.

ii) Dividend income on investment is accounted for
in the period/year in which the right to receive the
same is established.

iii) Rental income (net of taxes) on assets given
under operating lease arrangements is
recognized on a straight-line basis over the period
of the lease unless the receipts are structured to
increase in line with expected general inflation
to compensate for the Company’s expected
inflationary cost increases.

1.13 Government grants:

Government grants are recognised when there is
reasonable assurance that the Company will comply with
the conditions attaching to them and that the grants will
be received.

Export incentives principally comprises of Duty Drawback
and rebate on state & central taxes and levies (RoSTCL)
based on guidelines formulated for the respective scheme
by the government authorities. Export incentives related
to operations provided by government are recognized as
income on accrual basis in Statement of Profit and Loss
only to the extent that realisation/utilisation is certain.

1.14 Trade receivables:

Trade receivables are amounts due from customers for
goods sold or services performed in the ordinary course
of business. If the receivable is expected to be collected
within a period of 12 months or less from the reporting date
(or in the normal operating cycle of the business, if longer),
they are classified as current assets, otherwise as non¬
current assets.

Trade receivables are measured at their transaction price
unless it contains a significant financing component or
pricing adjustments embedded in the contract. In case a
financing component exits the consideration for the goods
and service is adjusted for the time value of company.

Loss allowance for expected life time credit loss is
recognised on initial recognition.

1.15 Leases:

a) As a Lessee:

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: (i)
the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic
benefits from use of the asset through the period of

the lease and (iii) the Company has the right to direct
the use of the asset.

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 on a
straight-line basis over the lease term. 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 these 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.

b) Short-term leases and leases of low value assets:

The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption to leases that are considered
to be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight line basis over the lease term.

c) As a Lessor:

Lease income from operating leases where the
company is a lessor is recognized (net of GST) in
income on a straight-line basis over the lease term.
The respective leased assets are included in the
balance sheet based on their nature.

1.16 Employees’ Benefits:

a) Short-term employee benefits:

All employee benefits falling due wholly within twelve
months of rendering the service are classified as
short-term employee benefits and they are recognized
as an expense at the undiscounted amount in the
Statement of Profit and Loss in the period in which the
employee renders the related service.

b) Post-employment benefits:

i) Defined contribution plan:

The defined contribution plan is post¬
employment benefit plan under which the
Company contributes fixed contribution to a
government administered fund and will have
no obligation to pay further contribution. The
Company’s defined contribution plan comprises
of Provident Fund, Employee State Insurance
Scheme, Employee Pension Scheme, National
Pension Scheme and Labour Welfare Fund. The
Company’s contribution to defined contribution
plans are recognized in the Statement of Profit
and Loss in the period in which employee renders
the related service.

If the contribution payable to the scheme for
service received before the Balance Sheet date
exceeds the contribution already paid, the deficit
payable to the scheme is recognised as a liability
after deducting the contribution already paid.
If the contribution already paid exceeds the
contribution due for services received before the
Balance Sheet date, then excess is recognised
as an asset to the extent that the pre-payment
will lead to a reduction in future payment or a
cash refund.

i) Defined benefit plan:

The Company’s obligation towards gratuity
liability is funded to an approved gratuity fund,
which fully covers the said liability under Cash
Accumulation Policy of Life Insurance Corporation
of India (LIC). The present value of the defined
benefit obligations is determined based on
actuarial valuation using the projected unit
credit method. The rate used to discount defined
benefit obligation is determined by reference
to market yields at the Balance Sheet date on

Indian Government Bonds for the estimated term
of obligations.

The current service cost of the defined benefit
plan, recognised in the Statement of Profit and
Loss as employee benefits expense, reflects
the increase in the defined benefit obligation
resulting from employee service in the current
year, benefit changes, curtailments and
settlements. Past service costs are recognised
in statement of profit and loss in the period of a
plan amendment.

The net interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation and fair value of plan
assets. This cost is included in employee benefit
expense in Statement of Profit and Loss.

Re-measurement gains or losses arising from
experience adjustments changes in actuarial
assumptions is reflected immediately in the
Balance Sheet with a charge or credit recognized
in Other Comprehensive Income (OCI) in the
period in which they occur. Re-measurement
recognized in OCI is reflected immediately in
retained earnings and will not be reclassified to
Statement of Profit and Loss in the subsequent
period. Re-measurements comprises of (a)
actuarial gains and losses, (b) the effect of the
asset ceiling (excluding amounts included in net
interest on the net defined benefit liability) and
© the return on plan assets (excluding amounts
included in net interest on the net defined benefit
liability).

iii) Other employee benefits:

As per the Company’s policy, employees who have
completed specified years of service are eligible
for death benefit plan wherein defined amount
would be paid to the survivors of the employee on
the death of the employee while in service with
the Company. To fulfil the Company’s obligation
for the above-mentioned plan, the Company has
taken term policy from an insurance company.
The annual premium for insurance cover is
recognized in the Statement of Profit and Loss.

1.17 Income Taxes:

a) Tax expenses comprise of current tax, deferred
tax charge or credit and adjustments of taxes for
earlier years. In respect of amounts adjusted against
securities premium or retained earnings or other
reserves, the corresponding tax effect is also adjusted
against the securities premium or retained earnings
or other reserves, as the case may be, as per the
announcement of Institute of Chartered Accountant
of India.

b) Current Tax is measured on the basis of estimated
taxable income for the current accounting period in
with the applicable tax rates and the provisions of the
Income-tax Act, 1961 and other applicable tax laws.

c) Deferred tax is provided, on all temporary differences
at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes. Deferred tax assets and liabilities
are measured at the tax rates that are expected to
be applied to the temporary differences when they
reverse, based on the laws that have been enacted or
substantively enacted at the reporting date.

The Company has adopted the amendments with
respect to Deferred Tax related to Assets and Liabilities
arising from a Single Transaction (Amendments to Ind
AS 12) from 1^st April 2023. The amendments narrow the
scope of the initial recognition exemption to exclude
transactions that give rise to equal and offsetting
differences - e.g., leases and decommissioning
liabilities. For leases and decommissioning liabilities,
an entity is required to recognise the associated
deferred tax assets and liabilities from the beginning
of the earliest comparative period presented, with
any cumulative effect recognised as an adjustment
to retained earnings or other components of equity at
that date. For all other transactions, an entity applies
the amendments to transactions that occur on or
after the beginning of the earliest period presented.

The Company previously accounted for deferred tax
on leases and decommissioning liabilities by applying
the 'integrally linked’ approach, resulting in a similar
outcome as under the amendments, except that the
deferred tax asset or liability was recognised on a net
basis. Following the amendments, the Company has
recognised a separate deferred tax asset in relation
to its lease liabilities and a deferred tax liability in
relation to its right-to-use assets as at 1^st April 2022
and thereafter.

However, there was no impact on the balance sheet
because the balances qualify for offset under
paragraph 74 of Ind AS 12. There was also no impact
on the opening retained earnings as at 1^st April 2022
as a result of the change.

Tax relating to items recognised directly in equity
or OCI is recognised in equity or OCI and not in the
Statement of Profit and Loss. Deferred tax assets
and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets and
they relate to income taxes levied by the same
tax authority, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets
and liabilities will be realized simultaneously.

A deferred tax asset is recognized only to the extent
that it is probable that future taxable profits will be
available against which the temporary difference can
be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is
no longer probable.

1.18 Earnings per Share:

Basic earnings per share (EPS) are calculated by dividing
the net profit or loss (after tax) for the year attributable to
equity shareholders by the weighted average number of
equity shares outstanding during the year. The weighted
average number of equity shares outstanding during the
period is adjusted for events of bonus issue and share split
if any.

For the purpose of calculating diluted earnings per share,
the net profit or loss (after tax) for the year attributable to
equity shareholders and the weighted average number of
equity shares outstanding during the year are adjusted for
the effects of all dilutive potential equity shares.

1.19 Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are
recorded at the exchange rates prevailing on the date
of the transaction.

b) As at balance sheet date, foreign currency monetary
items are translated at closing exchange rate. Foreign
currency non-monetary items carried at fair value are
translated at the rates prevailing at the date when
the fair value was determined. Foreign currency non¬
monetary items measured in terms of historical cost
are translated using the exchange rate as at the date
of initial transactions.

c) Exchange difference arising on settlement or
translation of foreign currency monetary items are
recognized as income or expense in the year in which
they arise except to the extent exchange differences
are regarded as an adjustment to interest cost on
those foreign currency borrowings.

d) As per Appendix B to Ind AS 21, when an entity has
received or paid advance contribution in a foreign
currency, transaction rate as on the date of receipt
of advance is considered for recognition of related
asset, expenses or income.

1.20 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 assets:

Initial recognition and measurement:

The Company recognizes a financial asset in its Balance
Sheet when it becomes party to the contractual provisions
of the instrument. All financial assets are recognized
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. 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 recognized 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). 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 recognized 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. However, trade receivables that do not
contain a significant financing component are measured
at transaction price (see second para of note 1.14 on trade
receivables).

Subsequent measurement:

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

• The Company’s business model for managing the
financial asset and

• The contractual cash flow characteristics of the
financial asset.

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

a) Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if
both the following conditions are met:

i) The Company’s business model objective for
managing the financial asset is to hold financial
assets in order to collect contractual cash
flows, and

ii) The contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

This category applies to cash and bank balances,
trade receivables, loans and other financial

assets of the Company. Such financial assets are
subsequently measured at amortized cost using
the effective interest method. Under the effective
interest method, the future cash receipts are
exactly discounted to the initial recognition value
using the effective interest rate. The cumulative
amortization using the effective interest method
of the difference between the initial recognition
amount and the maturity amount is added to
the initial recognition value (net of principal
repayments, if any) of the financial asset over
the relevant period of the financial asset to arrive
at the amortized cost at each reporting date.
The corresponding effect of the amortization
under effective interest method is recognized as
interest income over the relevant period of the
financial asset. The same is included under other
income in the Statement of Profit and Loss.

The amortized cost of a financial asset is also
adjusted for loss allowance, if any.

b) Financial assets measured at fair value through
other comprehensive income (FVTOCI):

A financial asset is measured at FVTOCI if both of the
following conditions are met:

i) The Company’s business model objective for
managing the financial asset is achieved both by
collecting contractual cash flows and selling the
financial assets, and

ii) The contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

The Company, through an irrevocable election at
initial recognition, has measured certain investments
in equity instruments at FVTOCI, refer note 2.3(a). The
Company has made such election on an instrument by
instrumentbasis. Theseequityinstrumentsareneither
held for trading nor are contingent consideration
recognized under a business combination. Pursuant to
such irrevocable election, subsequent changes in the
fair value of such equity instruments are recognized
in OCI. However, the Company recognizes dividend
income from such instruments in the Statement of
Profit and Loss when the right to receive payment is
established, it is probable that the economic benefits
will flow to the Company and the amount can be
measured reliably.

On derecognition of such financial assets, cumulative
gain or loss previously recognized in OCI is not
reclassified from the equity to Statement of Profit and
Loss. However, the Company may transfer

such cumulative gain or loss into retained earnings
within equity.

c) Financial assets measured at fair value through
profit or loss (FVTPL):

A financial asset is measured at FVTPL unless it is
measured at amortized cost or at FVTOCI as explained
above. This is a residual category applied to all other
investments of the Company excluding investments
in subsidiary and joint venture. Such financial assets
are subsequently measured at fair value at each
reporting date. Fair value changes are recognized in
the Statement of Profit and Loss.

Derecognition:

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is derecognized (i.e. removed from
the Company’s Balance Sheet) when any of the
following occurs:

a) The contractual rights to cash flows from the
financial asset expires;

b) The Company transfers its contractual rights to
receive cash flows of the financial asset and has
substantially transferred all the risks and rewards
of ownership of the financial asset;

c) The Company retains the contractual rights to
receive cash flows but assumes a contractual
obligation to pay the cash flows without material
delay to one or more recipients under a 'pass¬
through’ arrangement (thereby substantially
transferring all the risks and rewards of ownership
of the financial asset);

d) The Company neither transfers nor retains
substantially all risk and rewards of ownership and
does not retain control over the financial asset.

In cases where Company has neither transferred
nor retained substantially all of the risks and rewards
of the financial asset, but retains control of the
financial asset, the Company continues to recognize
such financial asset to the extent of its continuing
involvement in the financial asset. In that case, the
Company also recognizes an associated liability.
The financial asset and the associated liability are
measured on a basis that reflects the rights and
obligations that the Company has retained.

On derecognition of a financial asset, (except as
mentioned in (ii) under classification above for
financial assets measured at FVTOCI), the difference
between the carrying amount and the consideration
received is recognized in the Statement of Profit
and Loss.

Impairment of financial assets:

The Company applies expected credit losses (ECL)
model for measurement and recognition of loss
allowance on the following:

a) Trade receivables and lease receivables.

b) Financial assets measured at amortized
cost (other than trade receivables and lease
receivables).

I n case of trade receivables and lease receivables,
the Company follows a simplified approach wherein
an amount equal to lifetime ECL is measured and
recognized as loss allowance.

In case of other assets (listed as (ii) above), the
Company determines if there has been a significant
increase in credit risk of the financial asset since
initial recognition.

I f the credit risk of such assets has not increased
significantly, an amount equal to 12-month ECL
is measured and recognized as loss allowance.
However, if credit risk has increased significantly,
an amount equal to lifetime ECL is measured and
recognized as loss allowance.

Subsequently, if the credit quality of the financial
asset improves such that there is no longer
a significant increase in credit risk since initial
recognition, the Company reverts to recognizing
impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash
flows that are due to the Company in accordance with
the contract and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls), discounted
at the original effective interest rate.

Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected
life of a financial asset. 12-month ECL are a portion of
the lifetime ECL which result from default events that
are possible within 12 months from the reporting date.

ECL are measured in a manner that they reflect
unbiased and probability weighted amounts
determined by a range of outcomes, taking
into account the time value of money and other
reasonable information available as a result of past
events, current conditions and forecasts of future
economic conditions.

As a practical expedient,the Company uses a provision
matrix to measure lifetime ECL on its portfolio of
trade receivables. The provision matrix is prepared
based on historically observed default rates over
the expected life of trade receivables and is adjusted

for forward-looking estimates. At each reporting date,
the historically observed default rates and changes in
the forward-looking estimates are updated.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the Statement of Profit and Loss
under the head 'Other expenses’.

Investment in subsidiaries and joint venture:

The Company has elected to recognize its
investments in subsidiaries and joint venture at cost
in accordance with the option available in Ind AS
27, 'Separate Financial Statements’. Investments in
subsidiaries and joint venture are carried at cost less
accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount
of the investment is assessed. Where the carrying
amount of an investment is greater than its estimated
recoverable amount, it is written down immediately
to its recoverable amount and the difference is
transferred to the Statement of Profit and Loss. On
disposal of investment, the difference between the
net disposal proceeds and the carrying amount
is charged or credited to the Statement of Profit
and Loss.

Financial Liabilities:

Classification as debt or equity:

Financial liabilities and equity instruments issued
by the Company are classified according to the
substance of the contractual arrangements entered
into and the definitions of a financial liability and an
equity instrument.

Equity instruments:

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued
by the Company are recognised at the proceeds
received, net of direct issue costs.

Initial recognition and measurement:

The Company recognizes a financial liability in
its Balance Sheet when it becomes party to the
contractual provisions of the instrument. All financial
liabilities are recognized 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.

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 recognized 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).

I n 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 recognized 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:

All financial liabilities of the Company are
subsequently measured at amortized cost using the
effective interest method.

Under the effective interest method, the future
cash payments are exactly discounted to the initial
recognition value using the effective interest rate.
The cumulative amortization using the effective
interest method of the difference between the
initial recognition amount and the maturity amount
is added to the initial recognition value (net of
principal repayments, if any) of the financial liability
over the relevant period of the financial liability to
arrive at the amortized cost at each reporting date.
The corresponding effect of the amortization under
effective interest method is recognized as interest
expense over the relevant period of the financial
liability. The same is included under finance cost in the
Statement of Profit and Loss.

Derecognition:

A financial liability is derecognized when the
obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is
replaced by another from the same lender on
substantiallydifferentterms, or the terms of an existing
liability are substantially modified, such an exchange
or modification is treated as the Derecognition of
the original liability and the recognition of a new liability.
The difference between the carrying amount of the
financial liability derecognized and the consideration
paid is recognized in the Statement of Profit and Loss.

Offsetting financial instruments:

Financial assets and liabilities are offset and the net
amount reported in the balance sheet when there is
a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a
net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must

not be contingent on future events and must be
enforceable in the normal course of business and in
the event of default, insolvency or bankruptcy of the
Company or the counterparty.

1.21 Fair Value Measurement:

The Company measures financial instruments, such
as investments and derivatives at fair values at each
Balance Sheet date. 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. The fair value measurement is based
on the presumption that the transaction to sell the asset
or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company. The fair value of an asset or
a liability is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their economic
best interest.

A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use, or by selling it to another market participant
that would use the asset in its highest and best use. The
Company uses valuation techniques that are appropriate
in the circumstances and for which sufficient data are
available to measure fair value, categorize the use of
relevant observable inputs and categorize the use of
unobservable inputs.

All assets and liabilities (for which fair value is measured
or disclosed in the financial statements) are categorized
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.

• Level 2 - Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable other
than quoted prices included in Level 1.

• Level 3 - Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

For financial assets and liabilities maturing within one year
from the Balance Sheet date and which are not carried at
fair value, the carrying amount approximates fair value due

to the short maturity of these instruments. For assets and
liabilities that are recognised in the financial statements
on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy
by reassessing categorization (based on the lowest level
input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

1.22 Cash Flow Statement and Cash and Cash
Equivalents:

Cash and cash equivalents include cash in hand, bank
balances, deposits with banks (other than on lien) and all
short term highly liquid investments / mutual funds (with
zero exit load at the time of investment) that are readily
convertible into known amounts of cash and are subject
to an insignificant risk of changes in value. Cash flows are
reported using the indirect method, where by net profit
before tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities are segregated.

1.23 Dividend distribution:

Final equity dividends on shares are recorded as a liability
on the date of approval by the shareholders and interim
equity dividends are recorded as a liability on the date of
declaration by the Company’s Board of Directors.

1.24 Operating Segment:

Operating segments have been identified taking into
account the nature of the products / services, geographical
locations, nature of risks and returns, internal organization
structure and internal financial reporting system. The
Company prepares its segment information in conformity
with the accounting policies adopted for preparing and
presenting the financial statements of the Company as a
whole. These operating results are regularly reviewed by
the company’s Chief Operating Decision Maker (“CODM”).

1.25 Critical accounting judgements and key sources
of estimation uncertainty:

The preparation of the Company’s 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.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in
future periods.

Critical judgements and estimates in applying
accounting policies:

a) Property, Plant and Equipment:

Property, Plant and Equipment represent a significant
proportion of the asset base of the Company. The
charge in respect of periodic depreciation is derived
after determining an estimate of an asset’s expected
useful life. The useful lives of the Company’s assets
are determined by the management at the time the
asset is acquired and reviewed periodically, including
at each financial year end. The lives are based on
historical experience with similar assets as well as
anticipation of future events, which may impact their
life, such as changes in technical or commercial
obsolescence arising from changes or improvements
in production or from a change in market demand of
the product or service output of the asset.

b) Estimation of Defined benefit obligation:

The costs of providing post-employment benefits
are charged to the Statement of Profit and Loss in
accordance with Ind AS 19 'Employee benefits’ over
the period during which benefit is derived from the
employees’ services. The costs are assessed on the
basis of assumptions selected by the management.
These assumptions include salary escalation rate,
discount rates, expected rate of return on assets and
mortality rates. The same is disclosed in Note 2.39.

c) Refund liability: Refer Note 112(d)

d) Provision for inventories:

The Company provides for obsolescence on slow
moving & non-moving inventory based on policy, past
experience, current trend and future expectations of
finished goods and raw materials depending on the
category of goods.

e) Fair value measurement of Financial Instruments:

Refer Note 1.21

f) Impairment:

An impairment loss is recognised for the amount by
which an asset’s or cash-generating unit’s carrying
amount exceeds its recoverable amount to determine
the recoverable amount, management estimates
expected future cash flows from each asset or cash
generating unit and determines a suitable interest rate
in order to calculate the present value of those cash
flows. In the process of measuring expected future
cash flows, management makes assumptions about
future operating results. These assumptions relate to
future events and circumstances. The actual results
may vary and may cause significant adjustments to
the Company’s assets. In most cases, determining
the applicable discount rate involves estimating
the appropriate adjustment to market risk and the
appropriate adjustment to asset-specific risk factors.

g) Impairment of investment in subsidiaries and
joint ventures:

The Company conducts impairment reviews of
investments in subsidiaries and joint ventures
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable or
tests for impairment annually. Determining whether
the investments in subsidiaries and joint venture
are impaired requires an estimate of the value in
use of investments. In considering the value in use,
the management has anticipated future cash flows
and other factors of the underlying businesses /
operations of the subsidiaries & joint venture and a
suitable discount rate in order to calculate the present
value. Any subsequent changes to the cash flows due
to changes in the above-mentioned factors could
impact the carrying value of investments. Periodic
external valuation reports are also obtained.

h) Determining the lease term of contracts
with renewal as a Lessee:

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS
116. Identification of a lease requires significant
judgement. The Company uses significant judgement
in assessing the lease term (including anticipated
renewals).

The Company determines the lease term as the non¬
cancellable period of a lease, together with both
periods covered by an option to extend the lease if
the Company is reasonably certain to exercise that
option; and periods covered by an option to terminate
the lease if the Company is reasonably certain not
to exercise that option. In assessing whether the
Company is reasonably certain to exercise an option
to extend a lease, or not to exercise an option to
terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive
for the Company to exercise the option to extend
the lease, or not to exercise the option to terminate
the lease. Any subsequent change in certainty of
exercising option to extend lease term could impact
the carrying value of right of use asset and lease
liability significantly.

i) Estimation of provisions and contingencies:

Provisions are liabilities of uncertain amount or timing
recognized where a legal or constructive obligation
exists at the balance sheet date, as a result of a past
event, where the amount of the obligation can be
reliably estimated and where the outflow of economic
benefit is probable. Contingent liabilities are possible
obligations that may arise from past event whose
existence will be confirmed only by the occurrence

1.26 New standard issued / modified but not effective
as at reporting date

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.

For the year ended March 31, 2025, MCA has notified Ind
AS - 117 Insurance Contracts and amendments to Ind AS
116 - Leases, relating to sale and leaseback transactions,
applicable to the Company w.e.f. April 1, 2024. The Company
has reviewed the new pronouncements and based on
its evaluation has determined that it does not have any
significant impact in its financial statements.

2.17.1

• Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares,
write-off equity related expenses like underwriting costs, etc.

• General Reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net
income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if
a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend
distribution is less than the total distributable results for that year. Consequent to introduction of the Companies Act 2013, the
requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However,
the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of
the Companies Act, 2013.

• Equity instruments through OCI - This represents the cumulative gains and losses arising on the revaluation of equity instruments
measured at FVTOCI, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are
disposed off.

• Retained Earnings: Retained Earnings are the profits the Company has earned till date, less any transfer to General Reserve,
dividends or other distributions paid to the shareholders. The reserve can be utilised in accordance with the provisions of the
Companies Act, 2013.

• Business Progressive fund: The Company has created “Business Progressive Fund” by appropriating a sum of H 500 (P.Y. H Nil)
lakhs out of its profits to maintain normal growth in sluggish market conditions and support superior growth for long term. The
said fund shall be for the purpose of launching & promoting new products, advertisement campaigns, promotional schemes and
initial support to masterstockiest and franchisees for developmentof retail business, reinforce existing channels of sales etc. The
amount of fund is specifically earmarked and invested in liquid mutual funds or any other safe and highly liquid investments. The
Company has made adequate provisions in accordance with Indian Accounting Standard (AS) -37 in normal course of business.
INDAS-37 does not permit providing for expenses where present obligation does not exist or there is no fixed commitment.

Accordingly the Company has opted to create Business Progressive Fund. Further addition to the aforesaid fund shall be reviewed
from time to time considering business environment and conditions and the income accrued from the fund. Any accretion to the
investment shall be credited to Statement of Profit and Loss.

• Cost Contingency Fund : The Company had created a “Cost Contingency Fund” by appropriating a sum of Rs Nil (P.Y. 3,000) lakhs
from its reserves to be utilized in the event of exceptional or significant costs incurred during sluggish market conditions, new
competition, pandemics, or natural calamities. The fund shall be used in accordance with the said objectives. The amount of

2.50 Financial risk management objectives and policies:

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The
main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include
trade and other receivables, investments and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management
of these risks. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of
Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a) Market Risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: (i) interest rate risk and (ii) other price risk & (iii) commodity
risk. Market risk is attributable to all market risk sensitive financial instruments including investments and borrowings. The
sensitivity analysis in the following sections relate to the position as at March 31, 2025 and March 31, 2024.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post¬
retirement obligations; provisions.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at March 31, 2025 and March 31, 2024.

i) 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 short term debt obligations with floating interest rates. The Company has sufficient amount of liquid
investments to mitigate the interest risk on its short term debt obligations.

Interest rate sensitivity:

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings taken at floating rates. With all other variables held constant, the Company’s profit / (loss) before tax is
affected through the impact on floating rate borrowings, as follows:

ii) Other price risk:

The Company is mainly exposed to the price risk due to its investment in equity instruments, mutual funds, bonds,
AIF and portfolio management services. The price risk arises due to uncertainties about the future market values of
these investments.

The fair value of quoted equity instruments classified at fair value through other comprehensive income as at March 31,
2025 of H 298.51 (P.Y. H 273.31 lakhs) and the fair value of investments in equity instrument classified at fair value through
profit & loss (FVTPL) as at March 31, 2025 of H 1,545.82 (P.Y. H 1,552.66 lakhs). The fair value of investment in mutual funds
classified at FVTPL as at March 31, 2025 of H 25,377.77 (P.Y. H 30,870.41 lakhs). The fair value of investment in bonds, AIF and
portfolio management services classified at FVTPL as at March 31, 2025 of H 783.21 (P.Y. of H 930.09 lakhs).

The Company has laid policies and guidelines which it adheres to in order to minimise price risk arising from these
investments. As an estimation of the approximate impact of price risk, with respect to these investments, the Company
has calculated the impact as follows:

For equity instruments, a 10 % increase in prices may have led to approximately an additional H 29.85 (P.Y. H 27.33) gain in
other comprehensive income which are classified at fair value through other comprehensive income and an additional
H 154.58 (P.Y. H 155.27) gain in profit & loss which are classified at fair value through profit & loss. A 10 % decrease in prices
may have led to an equal but opposite effect.

For mutual funds a 1% increase in prices may have led to approximately an additional H 253.78 (P.Y. H 308.70) gain in Profit &
Loss. A 1% decrease in prices may have led to an equal but opposite effect.

For bonds, AIF and portfolio management services a 1% increase in prices may have led to approximately an additional
H 783 (P.Y. H 9.30) Gain in Profit & Loss. A 1% decrease in prices may have led to an equal but opposite effect.

iii) Commodity Price Risk

The Company is exposed to the risk of price fluctuations in raw materials, primarily cotton and synthetic fabric, which
are key inputs in the garment manufacturing process. Volatility in commodity prices can adversely impact the cost of
production and operating margins. To manage this risk, the Company monitors market trends and enters into purchase
contracts with suppliers to secure prices wherever feasible. The Company continuously monitors economic conditions,
seasonal changes, environmental issues, and government regulations. However, the Company does not use derivative
contracts for hedging commodity price risk as of the reporting date.

b) Credit risk:

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables). Also refer
note 2.52(b) for details regarding customer concentration.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase
in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as
at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to

meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party

guarantees or credit enhancements.

Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in
a repayment plan with the Company.

Assets in the nature of Investment, security deposits, loans and advances are measured using 12 months expected credit
losses (ECL). Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. Trade
receivables are measured using lifetime expected credit losses.

For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix.
The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and
is adjusted for forward-looking estimates. The provision matrix at the end of the reporting period is given below.

Financial Assets for which loss allowances is measured using the Expected Credit Losses (ECL):

The Ageing analysis of Account receivables has been considered from the date the invoice falls due:

2.51 Capital Management:

a) Risk Management:

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity
reserves attributable to the equity holders. The Company aims to manage its capital efficiently so as to safeguard its ability
to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in
order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the
capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order
to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders or issue new shares.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain
investor, creditors and market confidence and to sustain future development and growth of its business. The Company will
take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

The Company monitors capital using Net debt-equity ratio, which is Net debt (i.e. total debt less cash & cash equivalents and
current investments) divided by total equity:

2.52 Segment Reporting:

a) The Company is engaged in the business of manufacturing and marketing of apparels & trading of lifestyle accessories/
products. The Company is also generating power from Wind Turbine Generator. The power generated from the same is
predominantly used for captive consumption. However, the operation of Wind Turbine Segment is within the threshold
limit stipulated under IND AS 108 “Operating Segments” and hence it does not require disclosure as a separate reportable
segment. As defined in Ind AS 108 'Operating Segments’, the Chief Operating Decision Maker evaluates the Company’s
performance related to Apparels business and allocates resources based on an analysis of various performance indicators.
Accordingly, Sale of Apparels is considered as only business segment.

b) The customer base of the company is diverse with different distribution channels and store formats except in case of one
customer where the concentration is greater than other parties.

2.58 Utilisation of Borrowed funds and Share premium:

a) During the year, 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) During the year, 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 issued 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 to or on behalf of the Ultimate Beneficiaries.

2.59 Details of crypto currency or virtual currency:

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

2.60 Additional information as required by para 5 of General Instructions for preparation of Statement of Profit and Loss (other

than already disclosed above) are either Nil or Not Applicable.

2.64

a) The Company has incorporated wholly owned subsidiary company Kewal Kiran Developers Limited (formerly known as
Kewal Kiran Design Studio) (formerly known as K-Lounge Lifestyle Limited) on February 25, 2021. The Authorised Share
Capital of the said subsidiary company is H 11,000.00 lakhs and paid-up Share Capital the said subsidiary company is
H 9,100.00 lakhs.

During the year, the Company gave an unsecured loan of H 7,000 lakhs to its wholly owned subsidiary, Kewal Kiran Developers
Ltd. (formerly known as Kewal Kiran Design Studio Ltd.) (formerly known as K-Lounge Lifestyle Ltd.) and subsequently
converted the said loan into equity shares by subscribing to the right issue of said wholly owned subsidiary. Subsequently,
the Company has also subscribed to the right issue of shares of H 1,300 lakhs of said wholly owned subsidiary.

b) The Company has incorporated wholly owned subsidiary company Kewal Kiran Lifestyle Limited on March 11, 2024. The
Authorised Share Capital of the said subsidiary company is H 1,000.00 lakhs and paid-up Share Capital the said subsidiary
company is H 1.00 lakhs. The Company has subscribed entire paid-up Share Capital of H 1.00 lakhs on April 3, 2024.

However, the company has decided to strike off the wholly owned subsidiary and the required form has been filed on 25^th
March 2025 which is under process as on date.

Considering the losses in the wholly owned subsidiary the said investment has been written off during the year. Further,
there is no pending obligation in respect of the same as on date.

c) The Company has acquired stake in Kraus Casals Pvt. Ltd. through primary infusion and secondary purchase of shares for
consideration of H 16,651 lakhs (including deferred contribution) and in accordance with the terms of the Shareholders
Agreement (SHA) and Share Subscription and Purchase Agreement (SSPA), KCPL become a subsidiary of the Company
effective 18^th July 2024.

As per our audit report of even date

For and on behalf of For and on behalf of the Board of Directors

Jain & Trivedi N.A. Shah Associates LLP of Kewal Kiran Clothing Ltd.

Chartered Accountants Chartered Accountants

Registration No.: 113496W Registration No.: 116560W / W100149

Satish Trivedi Prashant Daftary Kewalchand P Jain Hemant P Jain

Partner Partner Chairman & Managing Director Jt. Managing Director

Membership No.: 38317 Membership No.: 117080 DIN No.: 00029730 DIN No.: 00029822

Nimesh Anandpara Bharat Adnani Abhijit Warange

Dy. Chief Financial Officer Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: May 12, 2025 Date: May 12, 2025