R) PROVISIONS, CONTINGENT LIABILITIES ANDCONTINGENT ASSETSProvisions:

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, 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 the obligation.
Provisions are determined by discounting the expected future
cash flows (representing the best estimate of the expenditure
required to settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognised as finance cost.
Expected future operating losses are not provided for.

Where the Company expects some or all of the expenditure
required to settle a provision will be reimbursed by another
party, the reimbursement is recognised when, and only when, it
is virtually certain that reimbursement will be received if the
entity settles the obligation. The reimbursement is treated as a
separate asset.

Contingent liabilities:

Contingent liability is a possible obligation arising from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the entity or a present
obligation that arises from past events but is not recognised
because it is not probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured
with sufficient reliability. The Company does not recognise a
contingent liability but discloses its existence in the standalone
financial statements.

Contingent assets:

Contingent asset is not recognised in standalone 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 recognized.

Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date

S) ONEROUS CONTRACTS

A contract is said to be onerous when the expected economic
benefits to be derived by the Company from the contract are
lower than the unavoidable cost of meeting its obligations under
the contract. The provision for onerous contract is measured at
the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing
with the contract, which is determined based on the incremental
costs of fulfilling the obligation under the contract and an
allocation of other costs directly related to fulfilling the contract.
Before such a provision is made, the Company recognises any
impairment loss on the assets associated with the contract.

3A Recent pronouncementsInd AS 1 - Presentation of Financial Statements

For accounting periods beginning on or after 1 April 2026, when
an entity breaches any covenant of a long-term loan
arrangement on or before the end of the reporting period with
the effect that the liability becomes payable on demand, it
classifies the liability as current, even if the lender agreed, after
the reporting period and before the approval of the financial
statements for issue, not to demand payment as a
consequence of the breach. An entity classifies the liability as
current because, at the end of the reporting period, it does not
have the right to defer its settlement for at least 12 months after
that date.

However, an entity classifies the liability as non-current if the
lender agreed by the end of the reporting period to provide a
period of grace ending at least 12 months after the reporting
period, within which the entity can rectify the breach and during
which the lender cannot demand immediate repayment.

This amendment is to be applied retrospectively for annual
reporting periods beginning on or after 1 April 2026, in
accordance with Ind AS 8, Accounting Policies, Accounting
Estimates and Errors."

17.1 Term / rights to shares
Equity shares

34,18,14,000 (Pr.Yr. 34,18,14,000) equity shares of ' 1 (' 1) each with voting rights. The holder of each equity share is entitled to
one vote per share. The Company declares and pays dividends in Indian rupees.

The Board declared and paid an interim dividend of ' 2.50 per share (face value of ' 1/- each) for the year 2025-26 (Pr.Yr. '2.50
per share) (face value of ' 1/- each).

The Board has recommended a final dividend of 250% (' 2.50/- per share of the face value of ' 1/- each) for the year 2025-26
(Pr.Yr. ' 2.50 per share) subject to the approval of the shareholders in Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive residual assets of the Company,
after settling the dues of preferential shareholders and other creditors as per priority. The distribution will be in proportion to the
number of equity shares held by the shareholders.

As per the records of the Company, including its register of shareholders/members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as
at the balance sheet date.

17.4 For the period of five years immediately preceeding the date at which the Balance Sheet is prepared:

(i) The Company has not issued any shares without payment being received in cash.

(ii) The Company has not issued any bonus shares.

(iii) The aggregate number of equity shares bought back by the Company during the year is Nil (Previous Years 3,50,14,920
shares of ' 1/- each, fully paid up).

(e) Provident fund:

Pursuant to the Supreme Court judgement dated February 28, 2019 on the inclusion of special allowances for contribution
to provident fund, the Company has been legally advised that there are interpretative challenges on the application of the
judgement retrospectively. Based on the legal advice and in the absence of the reliable measurement of the provision for
earlier periods, the Company has not recorded a provision for the prior years.

Notes:

(i) Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at
various forums / authorities.

(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions
are required and disclosed as contingent liabilities where applicable, in these standalone financial statements. The
Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.

39 Corporate social responsibility expenditure

The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) as per the
provisions of section 135 of the Companies Act, 2013 amounts to ' 1,552 Lakhs (Pr.Yr. ' 1,647 Lakhs). Amount spent during the year
on CSR activities (included in note 32 of the statement of profit and loss) as under:

The amount approved by the Board to be spent during the year towards Corporate Social Responsibility (CSR) as per the provisions
of section 135 of the Companies Act, 2013 amounts to ' 1,599 Lakhs (Pr.Yr. ' 1,680 Lakhs).

* Out of the excess closing balance in the table above, balance of ' 227 lakhs (Pr Yr ' 1,777 lakhs) represents CSR pre-spent in
earlier financial years to be adjusted against the Company’s future CSR obligation in accordance with the provisions of Companies
Act, 2013.

The Company has spent an amount of ' 47 Lakhs (Pr.Yr. ' 33 Lakhs) which was not carried forward as CSR pre-spent for adjustment
towards future CSR obligation stated above.

40 Financial instruments

Accounting classification and fair values:

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in
the fair value hierarchy:

# For financial assets and liabilities not measured at fair value, the Company has not disclosed the fair values of financial
instruments, since their carrying amounts are reasonable approximations of their fair values.

Note: There have been no transfers between Level 1, Level 2 and Level 3 during the current and previous year.Refer note 2E to the
standalone financial statements.

Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return
to stakeholders through optimisation of borrowings and equity.

The capital structure of the Company consists of net debt (borrowings as detailed in note 23 which is off set by cash and bank
balances as defined below) and Total Equity of the Company.

The Company is not subject to any externally imposed capital requirements.

The Company’s Net Debt to Total Equity ratio as at 31.03.2026 was as follows

* Debt is defined as non-current borrowings, current borrowings and current maturities of non-current borrowings as described in
note 23. Cash and Bank balances include cash and cash equivalents and Bank balances other than Cash and cash equivalents as
described in note 12 and note 13.

Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Market risk (see A below)

- Credit risk (see B below)

- Liquidity risk (see C below)

Risk Management Framework

The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International
financial markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports
which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate
risk), credit risk and liquidity risk.

The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written
principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial
instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors
on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.

The Company’s Board of Directors oversees how management monitors compliance with the Company’s risk management policies
and procedures, and reviews the adequacy of the risk management policies and procedures, and reviews the adequacy of the risk
management framework in relation to the risks faced by the Company. The Company’s Board of Directors are assisted in its
oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.

A. Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the
Company’s income or the value of holding of its financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign currency risk

The Company’s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates.
The Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.

Sensitivity analysis:

Sensitivity analysis is carried out for floating rate borrowings as at March 31,2026. For every 1% increase in average interest rates,
profit before tax would be impacted by loss of approximately ' 395 lakhs (Pr.Yr: ' 241 Lakhs). Similarly, for every 1% decrease in
average interest rates there would be an equal and opposite impact on the profit before tax. The calculations are based on a change
in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to
changes in interest rates. All other variables are held constant.

The Company does not expect any change in interest rates on fixed rate borrowings and accordingly have not presented any
sensitivities on such borrowings.

(iii) Price risk

The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties
about the future market values of these investments. As at 31.03.2026, the investments in mutual funds amounts to ' 3,307 lakhs
(Pr.Yr: ' 22,651 Lakhs).

As regards Company’s investments in unquoted equity instruments, the management contends that such investments do not
expose the Company to price risks. In general, these securities are not held for trading purposes.

Sensitivity analysis:

For every 1% increase in price, profit before tax would be impacted by gain of approximately ' 33 lakhs (Pr.Yr: ' 227 Lakhs). Similarly,
for every 1% decrease in price there would be an equal and opposite impact on the profit before tax.

B. Credit risk management

Credit risk is the risk that the counterparty to a financial instrument will not meet its contractual obligations, leading to a financial loss.
Credit risk primarily arises from the Company’s trade receivables, loans, investments, cash and cash equivalents, bank balances
other than cash and cash equivalents and other financial assets.

The Company mitigates credit risk by strict receivable management procedures and policies. The Company has a dedicated
independent team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially
through availment of credit insurance for both domestic and export buyers.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and
expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the
macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects
the historical trend of minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past
due by more than 90 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit
risk. The impairment loss at the reporting dates related to customers that have defaulted on their payments to the Company are not
expected to be able to pay their outstanding dues, mainly due to economic circumstances.

The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly
evaluates the quality of trade receivables and provides impairment loss on financial assets (trade receivables) based on expected
credit loss model.

Investments:

Investments of surplus funds are made only with approval of Board of Directors. This primarily include investments in equity
instruments of an unlisted entity and mutual funds. The Company does not expect significant credit risks arising from these
investments.

Cash and cash equivalents and Bank balances other than Cash and cash equivalents:

The Company held cash and cash equivalents and margin money deposits with credit worthy banks and financial institutions as at
the reporting dates which has been measured on the 12-month expected loss basis. The credit worthiness of the banks and financial
institutions are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.

Other financial assets:

Other financial assets primarily consists of Investment in wholly-owned subsidiary pending allotment, Interest accrued on bank
deposits and other deposits, security deposits and term deposit with Non-Banking Financial Companies. The Company does not
expect any loss from non-performance by these counter-parties.

C. Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company’s reputation.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity
risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities.

All current financial liabilities are repayable within one year.

41. Related Party Disclosures

Disclosures under "Ind AS" 24 - Related Party Disclosure, as identified and disclosed by the Management and relied upon by the
Auditors

41.5. Terms and conditions of transactions with related parties

The sales to and purchases from related party are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the period ended are unsecured and settlement occurs in cash. This assessment is undertaken each
financial year through examining the financial position of the related party and the market in which the related party operates.

41.6. Transfer pricing

The Company has transactions with related parties. For the financial year ended 31.03.2025, the Company has obtained the
Accountant’s report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act,1961 and has
filed the same with the tax authorities. For the year ended 31.03.2026, the Company maintains documents as prescribed by the
Income-tax Act, 1961 to prove that these transactions are at arm’s length and believes that the aforesaid legislation will not
have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

Notes:

a. The Company does not have any potential equity shares. Accordingly basic and diluted earnings per share would remain the
same.

43. Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components,
and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the
Company’s Managing Director (MD) to make decisions about resources to be allocated to the segments and assess their
performance.

The Company is engaged in only one business i.e. manufacturing and sale of textiles. The entity’s chief operating decision
maker considers the Company as a whole to make decisions about resources to be allocated to the segment and assess its
performance. Accordingly, the Company does not have multiple segments and these standalone financial statements are
reflective of the information required by the Ind AS 108 for textiles.

43.1. Revenue from sale of products and services by geographic location of customers:

The geographic information analyses the Company’s revenue by the Company’s country of domicile and other countries. In
presenting the geographical information, segment revenue has been determined based on the geographic location of the
customers.

44. Operating lease disclosure

44.1. As lessee:

The Company has taken factory premises, office spaces, plant and equipment and vehicles on cancellable operating leases.
The leases are for varied periods which are classified as short-term leases under Ind AS 116. The Company has incurred
'1,526 lakhs (Pr.Yr: ' 1,397 Lakhs) for the year ended 31.03.2026 towards expenses relating to short-term leases. The total
cash outflow for leases is ' 1,526 lakhs (Pr.Yr: ' 1,397 Lakhs) for the year ended 31.03.2026, including cash outflow of short¬
term leases. Also refer note 33.

44.2 As lessor:

The Company has given certain non-factory building on cancellable operating leases and has earned rental income
of ' 75 lakhs (Pr.Yr: ' 212 Lakhs) for the year ended 31.03.2026. Since the aforesaid leases are short-term in nature, there are
no lease payments receivable after one year as at 31.03.2026. The expected amount of minimum lease payments to be
received within one year is ' 75 lakhs (Pr.Yr: ' 212 Lakhs). Also refer note 29.

45.2. Defined benefit plan - gratuity

The Company provides for gratuity, a defined benefit retirement plan (’the Gratuity Plan’) covering eligible employees. The
Gratuity Plan provides a lump-sum payment to vested employees at retirement, death or termination of employment, of an
amount based on the respective employee’s salary and the tenure of employment with the Company. The Company’s
obligation towards Gratuity is a defined benefit plan and the details of actuarial valuation as at the year-end are given below:

The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions
and other relevant factors including supply and demand in the employment market.

45.3 Disclosure of Employee Benefits (Continued)

Asset-liability matching strategies

The Company has funded the liability with the insurance company. The entire investible assets are managed by the fund
managers of the insurance company and the asset values as informed by the insurance company has been taken for valuation
purpose. The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is
shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rates (in particular, the
significant fall in interest rates, which should result in a increase in liability without a corresponding increase in the asset).

Expected contributions to the plan for the next annual reporting period

The expected benefits are based on the same assumptions as are used to measure Company’s defined benefit plan
obligations as at 31.03.2026. The Company is expected to contribute ' 140 lakhs (Pr.Yr: ' 221 Lakhs) to defined benefit plan
obligations funds for the year ending 31.03.2027.

49 Impairment assessment of KPR Exports PLC, Ethiopia

During the year ended 31.03.2025, the Company performed an impairment assessment for investments made in KPR Exports
PLC, Ethiopia, due to changes in business environment as a result of civil unrest in Ethiopia. Further to such evaluation, the
Company has recognized a provision for impairment loss on such investments aggregating to I NR 188 lakhs. Also refer note 5
and 34 to the standalone financial statements.

50 Events after reporting period :

The Board of Directors have recommended a final dividend of ' 8,545 Lakhs (' 2.50 per share of the face value of ' 1/- each
(250%)) for the year 2025-26 subject to the approval of the shareholders in Annual General Meeting.

51 Other statutory information

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

b) The Company does not have any transactions with companies struck off.

c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.

d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

e) The Group has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding 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"

f) The Group 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 Group 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"

g) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income-tax Act, 1961).

h) The Company has not have been declared as wilful defaulters by any bank or financial institution or government or any
government authority.

i) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

j) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.

k) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond
the statutory period.

Note: Invested funds in mutual funds = (Investment in mutual fund as at the beginning of respective year Investment in mutual fund
as at the end of respective year) divided by 2

Reason for change more than 25%: The Company invests temporary funds in mutual funds. During the year, the overall decrease in
income from such invested funds resulted in decreased return.

Note: Invested funds in treasury funds = (Investment in margin money deposit, term deposit with Non-Banking Financial Companies
and in deposits with original maturity of less than three months as at the beginning of respective year Investment in margin money
deposit, term deposit with Non-Banking Financial Companies and in deposits with original maturity of less than three months as at
the end of respective year) divided by 2.

Reason for change more than 25%: Increase in ROI on treasury funds from 5.56% for the year ended 31.03.2025 to 8.11% in for the
year ended 31.03.2026 is on account of increase in income generated from bank deposits.

The notes from 1 to 52 are an integral part of these standalone financial statements.