Accounting Policies of LWS Knitwear Ltd. Company

Mar 31, 2025

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation and compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and
presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as
applicable to the Financial Statement.

These Financial Statements include Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity and
Statement of Cash Flows and Notes, comprising a summary of significant accounting policies and other explanatory
information and comparative information in respect of the preceding period.

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities
which have been measured at fair value or revalued amount:

• Derivative financial instruments,

• Certain other financial assets and liabilities which have been measured at fair value (refer accounting policy
regarding financial instruments).

The Financial Statements are presented in Indian Rupees (Rs.) and all values are rounded to the nearest Lakha
except wherever otherwise stated.

2.2 Summary of Significant Accounting Policies

(A) Current versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the reporting period, or

• Cash or Cash Equivalent unless restricted from being exchanged or used to settle liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when:

• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

• All other liabilities are classified as non-current.

Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.

(B) Fair Value Measurement

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 is
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that entity can access at
measurement date;

• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or
liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

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 re-assessing categorisation (based
on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting
period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.

(C) Foreign Currency

(i) Functional and Presentation Currency

The financial statements of the Company are presented using Indian Rupee (Rs.), which is also our
functional currency i.e. currency of the primary economic environment in which the company operates.

(ii) Transactions and Balances

Foreign currency transactions are translated into the respective functional currency using the exchange
rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are recognized in profit or loss.

(D) Property, Plant and Equipment

PPE is recognised when it is probable that future economic benefits associated with the item will flow to the
company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty
credits availed, if any, less accumulated depreciation and cumulative impairment, if any. Property, Plant and
Equipment acquired on hire purchase basis are recognised at their cash values. Cost includes professional
fees related to the acquisition of PPE and for qualifying assets, borrowing costs capitalised in accordance with
the company''s accounting policy.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "Capital Work-in¬
Progress". (Also refer to policies on leases, borrowing costs, impairment of assets and foreign currency
transactions).

Depreciation is recognised using Straight Line Method so as to write off the cost of the assets (other than
freehold land) less their residual values over their useful lives specified in Schedule II to the Companies Act,
2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life
so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of
consumption of the future economic-benefits embodied in the asset. The estimated useful life and residual
values are also reviewed at each financial year end and the effect of any change in the estimates of useful
life/residual value is accounted on prospective basis.

Where cost of a part of the asset("asset component") is significant to total cost of the asset and useful life of
that part is different from the useful life of the remaining asset, useful life of that significant part is determined
separately and such asset component is depreciated over its separate useful life.

Depreciation on additions to / deductions from, owned assets is calculated pro rata to the period of use.

Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised
carrying amount of the asset is allocated over its remaining useful life.

Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there
is reasonable certainty that the company shall obtain ownership of the assets at the end of the lease term,
such assets are depreciated based on the useful life prescribed under Schedule II to the Companies Act, 2013
or based on the useful life adopted by the company for similar assets.

Freehold land is not depreciated.

(E) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated amortization. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of
profit and loss in the year in which the expenditure is incurred.

Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "Intangible
Assets Under Development".

Intangible assets are amortised on Straight-Line Basis over the estimated useful life. The method of
amortisation and useful life is reviewed at the end of each accounting year with the effect of any changes in the
estimate being accounted for on a prospective basis.

Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so
as to allocate the asset''s revised carrying amount over its remaining useful life.

(F) Impairment of Non-Financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating
units'' (CGU) net selling price and its value in use. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely, independent of those from other assets
or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining net selling price,
recent market transactions are taken into account, if available. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value indicators.

Impairment losses on non-financial asset, including impairment on inventories, are recognized in the statement
of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such
properties, the impairment is recognised in OCI upto the amount of any previous revaluation surplus.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful
life.

An assessment is made at each reporting date to determine whether there is an indication that previously
recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates
the asset''s or CGU''s recoverable amount. A previously recognised impairment loss is reversed only if there
has been a change in the assumptions used to determine the asset''s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised
in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is
treated as a revaluation increase.

Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as
appropriate; and when circumstances indicate that the carrying value may be impaired.

(G) Non-Current Assets Held For Sale

The Company classifies non-current assets and disposal groups as ''Held For Sale'' if their carrying amounts
will be recovered principally through a sale rather than through continuing use and sale is highly probable i.e.
actions required to complete the sale indicate that it is unlikely that significant changes to the sale will be made
or that the decision to sell will be withdrawn.

Non-current assets held for sale and disposal groups are measured at the lower of their carrying amount and
the fair value less costs to sell. Assets and liabilities classified as held for sale are presented separately in the
balance sheet.

Property, Plant and Equipment and intangible assets once classified as held for sale are not depreciated or
amortised.

(H) Earnings per Share

Basic EPS amounts are calculated by dividing the profit for the year attributable to the shareholders of the
Company by the weighted average number of equity shares outstanding as at the end of reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to the shareholders of the Company by
the weighted average number of equity shares outstanding during the year plus the weighted average number
of Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity
shares.

(I) Cash and Cash Equivalents

Cash and Cash Equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Company''s cash management.

(J) Contingent Liabilities and Contingent Assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or
a present obligation that is not recognized because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a
liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a
contingent liability but discloses its existence in the financial statements.

Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity.

(K) Investment Property

Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as
investment property and measured and reported at cost, including transaction costs.

Depreciation is recognised using Straight-Line method so as to write off the cost of the investment property
less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013 or in case
of assets where the useful life was determined by technical evaluation, over the useful life so determined.
Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of
the future benefits embodied in the investment property. The estimated useful life and residual values are also
reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value
is accounted on prospective basis. Freehold land and properties under construction are not depreciated.

An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising
on derecognision of property is recognised in the Statement of Profit and Loss in the same period.

(L) Inventories

Inventories which comprise raw material, work in progress, finished goods, traded goods and stores and
spares are valued at the lower of cost and net realisable value.

The basis of determining costs for various categories of inventories is as follows:

(i) Raw materials, Components and Stores and Spares

Lower of cost and net realizable value. Cost ascertained on Weighted Average basis includes all the
purchase price, duties and taxes which are not recoverable from government authorities, freight inwards
and other expenditure directly attributable to the acquisition. Materials and other items held for use in the
production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost.

(ii) Stores and Spares

It includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition.realization

(iii) Work-In-Progress and Manufactured Finished Goods

Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity.

(iv) Traded Goods

Lower of cost and net realizable value. Cost ascertained on Weighted Averagebasis includes all the
purchase price, duties and taxes which are not recoverable from government authorities, freight inwards
and other costs incurred in bringing to their present location and condition.

Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs
of completion and estimated costs necessary to make the sale.

(M) Leases

(i) Company as a Lessee

The Company applies a single recognition and measurement approach for all leases, except for short¬
term leases and leases of low-value assets. The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.

1) Right-of-Use Assets

The Company recognises right-of-use assets at the commencement date of the lease. Right-of-use
assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted
for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, lease payments made at or before the
commencement date less any lease incentives received. Right-of-use assets are depreciated on a
Straight-Line basis from the commencement date to the end of lease term.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of
the asset.

The right-of-use assets are also subject to impairment as mentioned in the Impairment of non¬
financial assets section of the accounting policies of the company.

2) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the Company
and payments of penalties for terminating the lease, if the lease term reflects the Company exercising
the option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses in the period in which the event or condition that triggers the payment
occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate
at the lease commencement date because the interest rate implicit in the lease is not readily
determinable.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is re-measured if there is a modification, a change in the lease term, a change in the lease payments
or a change in the assessment of an option to purchase the underlying asset.

3) Short Term Leases and Leases of Low Value of Assets

The Company applies the short-term lease recognition exemption to its short-term leases of
machinery and equipment. 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.

(ii) Company as a Lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental income arising is accounted for on a
straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased asset and recognised over the lease term
on the same basis as rental income. Contingent rents are recognised as revenue in the period in which
they are earned.

(N) Financial Instruments

(i) Initial Recognition

Financial instruments i.e. Financial Assets and Financial Liabilities are recognised when the Company
becomes a party to the contractual provisions of the instruments. Financial instruments are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial instruments (other than financial instruments at fair value through profit or loss) are added to or
deducted from the fair value of the financial instruments, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial instruments assets or financial liabilities at fair
value through profit or loss are recognised in profit or loss.

(ii) Financial Assets
Subsequent Measurement

All recognised financial assets are subsequently measured at amortized cost using effective interest
method except for financial assets carried at fair value through Profit and Loss (FVTPL) or fair value
through Other Comprehensive Income (FVOCI).

1) Equity Investments in Subsidiaries, Associates and Joint Venture

The Company accounts for its investment in subsidiaries, joint ventures and associates and other
equity investments in subsidiary companies at cost in accordance with Ind AS 27 - ''Separate
Financial Statements''.

Investment in Compulsory Convertible Debentures of subsidiary company is treated as equity
investments, since they are convertible into fixed number of equity shares of subsidiary.

Investment made by way of Financial Guarantee contracts in subsidiary, associate and joint venture
companies are initially recognised at fair value of the Guarantee.

Interest free loans given by the Company to its subsidiaries associates and joint venture are in the
nature of perpetual debt which are repayable at the discretion of the borrowers. The borrower has
classified, the said loans as equity under Ind AS-32 ''Financial Instruments Presentation''. Accordingly
the Company has classified this investment as Equity Instrument and has accounted at cost as per
Ind AS-27 ''Separate Financial Statements''.

2) Equity Investments (other than investments in subsidiaries, associates and joint venture)

All equity investments falling within the scope of Ind-AS 109 are mandatorily measured at Fair Value
through Profit and Loss (FVTPL) with all fair value changes recognized in the Statement of Profit and
Loss.

The Company has an irrevocable option of designating certain equity instruments as FVOCI. Option
of designating instruments as FVOCI is done on an instrument-by-instrument basis. The classification
made on initial recognition is irrevocable.

If the Company decides to classify an equity instrument as FVOCI, then all fair value changes on the
instrument are recognized in Statement of Other Comprehensive Income (SOCI). Amounts from
SOCI are not subsequently transferred to profit and loss, even on sale of investment.

3) Investment in Preference Shares

Investment in preference shares are classified as debt instruments and carried at amortised cost if
they are not convertible into equity instruments and are not held to collect contractual cash flows.
Other Investment in preference shares which are classified as debt instruments are carried at FVTPL.

Investment in convertible preference shares of subsidiary, associate and joint venture companies are
treated as equity instruments and carried at cost. Other Investment in convertible preference shares
which are classified as equity instruments are mandatorily carried at FVTPL.

4) De-recognition

A financial asset is primarily derecognized when the rights to receive cash flows from the asset have
expired, or the Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a third party
under a pass through arrangement; and with that -

a) the Company has transferred substantially all the risks and rewards of the asset, or

b) the Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.

5) Impairment of Financial Assets

The Company assesses at each date of balance sheet whether a financial asset or a group of
financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a
loss allowance. The Company recognises lifetime expected losses for all trade receivables and/or
contract assets that do not constitute a financing transaction. For all other financial assets, expected
credit losses are measured at an amount equal to the 12 month expected credit losses or at an
amount equal to the life time expected credit losses if the credit risk on the financial asset has
increased significantly since initial recognition.

(iii) Financial Liabilities
Classification

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.

Subsequent measurement

The company have all the borrowings at floating interest rate. Being variable interest rate, it is not possible
to estimate future cash flows. Borrowings are recognised initially at an amount equal to the principal
receivable or payable on maturity. So, re-estimating the future cash flows has no significant impact on the
carrying value of Borrowings. Transaction costs are not material to be included in the EIR calculation. So
the carrying value is being considered as amortised cost for all the borrowings bearing a floating interest
rate. For trade and other payables maturing within one year from the balance sheet date, the carrying are
Amortised Cost.

Financial Liabilities recognised at FVTPL, including derivatives, are subsequently measured at fair value.

1) Compound Financial Instruments

Compound financial instruments issued by the company is an instrument which creates a financial
liability on the issuer and which can be converted into fixed number of equity shares at the option of
the holders.

Such instruments are initially recognised by separately accounting the liability and the equity
components. The liability component is initially recognised at the fair value of a comparable liability
that does not have an equity conversion option. The equity component is initially recognised as the
difference between the fair value of the compound financial instrument as a whole and the fair value
of the liability component. The directly attributable transaction costs are allocated to the liability and
the equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of the compound financial instrument is
measured at amortised cost using the effective interest method. The equity component of a
compound financial instrument is not re-measured subsequently.

2) Financial Guarantee Contracts

Financial guarantee contracts are initially recognised as a liability at fair value. The liability is
subsequently measured at carrying amount less amortization or amount of loss allowance determined
as per impairment requirements of Ind AS 109, whichever is higher. Amortisation is recognised as
finance income in the Statement of Profit and Loss.

3) De-Recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where
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.

Re-classification of Financial Instruments

The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no re-classification is made for financial assets, such as equity instruments
designated at FVTPL or FVOCI and financial liabilities or financial assets which are debt instruments,
a reclassification is made only if there is a change in the business model for managing those assets.

O) Revenue Recognition
(i) Revenue

Revenue from contracts with customers is recognised when control of the goods is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services. The Company has generally concluded that it is the principal in its
revenue arrangements because it typically controls the goods before transferring them to the customer.

1) Sale of Products

Revenue from sale of products is recognised at the point in time when control of the asset is
transferred to the customer. Amounts disclosed as revenue are net of returns and allowances, trade
discounts and rebates. The Company collects Goods & Service Tax (GST) on behalf of the
government and therefore, these are not economic benefits flowing to the Company. Hence, these
are excluded from the revenue.

Variable consideration includes trade discounts, volume rebates and incentives, etc. The Company
estimates the variable consideration with respect to above based on an analysis of accumulated
historical experience. The Company adjusts estimate of revenue at the earlier of when the most likely
amount of consideration we expect to receive changes or when the consideration becomes fixed.

2) Insurance & Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the
amount to be realized and the ultimate collection thereof.

(ii) Contract Balances

1) Contract Assets

A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If the Company performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, a contract asset is recognised for the earned
consideration that is conditional.

Contract assets represent revenue recognized in excess of amounts billed and include unbilled
receivables. Unbilled receivables, which represent an unconditional right to payment subject only to
the passage of time, are reclassified to accounts receivable when they are billed under the terms of
the contract.

2) Trade Receivables

A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment of the consideration is due).

3) Contract Liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration before the Company transfers goods or services to the customer, a contract
liability is recognised when the payment is made, or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when the Company performs under the contract.
Contract liabilities include unearned revenue which represent amounts billed to clients in excess of
revenue recognized to date and advances received from customers. For contracts where progress
billing exceeds, the aggregate of contract costs incurred to date plus recognised profits (or minus
recognised losses, as the case may be), the surplus is shown as contract liability and termed as
unearned revenue. Amounts received before the related work is performed are disclosed in the
balance sheet as contract liability and termed as advances received from customers.

P) Interest Income

For all debt instruments measured at amortized cost or at fair value through other comprehensive income,
interest income is recorded using the 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 instruments or a shorter
period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a
financial liability. When calculating the effective interest rate, the Company estimates the expected estimated
cash flows by considering all the contractual terms of the financial instrument but does not consider the
expected credit loss. Interest income is included under the head "Other Income" in the statement of profit and
loss.

Interest income on bank deposits and advances to vendors is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate. Interest income is included under the head
"Other Income" in the statement of profit and loss.

Q) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalised during the period of time that is required to complete and prepare the asset for its intended use
or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
intended use or sale.

(i) Borrowing Cost under Service Concession Arrangements

Borrowing costs attributable to the construction of qualifying assets under service concession
arrangement classified as intangible asset, are capitalised to the date of its intended use.

Borrowing costs attributable to concession arrangement classified as financial assets are charged to
Statement of Profit and Loss in the period in which such costs are incurred.

(ii) Other borrowing costs are charged to Statement of Profit and Loss in the period in which they are
incurred.

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Mar 31, 2024

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation and compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Financial Statement.

These Financial Statements include Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows and Notes, comprising a summary of significant accounting policies and other explanatory information and comparative information in respect of the preceding period.

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:

• Derivative financial instruments,

• Certain other financial assets and liabilities which have been measured at fair value (refer accounting policy regarding financial instruments).

The Financial Statements are presented in Indian Rupees (Rs.) and all values are rounded to the nearest Thousands except wherever otherwise stated.

2.2 Summary of Significant Accounting Policies

(A) Current versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the reporting period, or

• Cash or Cash Equivalent unless restricted from being exchanged or used to settle liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when:

• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

• All other liabilities are classified as non-current.

Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

(B) Fair Value Measurement

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 is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Fair value measurements are categorized into Level 1,2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that entity can access at measurement date;

• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

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 re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

(C) Functional Currency & Foreign Currency

(i) Functional and Presentation Currency

The financial statements of the Company are presented using Indian Rupee (Rs.), which is also our functional currency i.e. currency of the primary economic environment in which the company operates.

(ii) Transactions and Balances

Company has not made any transactions in Foreign currency during the year.

(D) Property, Plant and Equipment

PPE is recognised when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. Cost includes fees related to the acquisition of PPE and for qualifying assets, borrowing costs capitalised in accordance with the company''s accounting policy.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "Capital Work-in-Progress”. (Also refer to policies on leases, borrowing costs, impairment of assets and foreign currency transactions).

Depreciation is recognised using Straight Line Method so as to write off the cost of the assets (other than freehold land) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic-benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis.

Where cost of a part of the asset ("asset component”) is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.

Depreciation on additions to / deductions from, owned assets is calculated pro rata to the period of use.

Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.

(E) Earnings per Share

Basic EPS amounts are calculated by dividing the profit for the year attributable to the shareholders of the Company by the weighted average number of equity shares outstanding as at the end of reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to the shareholders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

(F) Cash and Cash Equivalents

Cash and Cash Equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

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Mar 31, 2014

NOTE NO. 1 GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards.

REVENUE RECOGNITION

Expenses and incomes considered payable and receivable respectively are accounted for on accrual basis.

FIXED ASSETS.

The Fixed assets are stated at Historical Cost less depreciation.

DEPRECIATION

Depreciation on fixed assets has been provided as per SLM Method of Companies Act 1956.

METHOD OF ACCOUNTING

The company has adopted mercantile system of accounting.

VALUATION OF INVENTORIES

Store & Spares are valued and certified by the management. As per their views the stocks are valued at cost or net realisable value whichever is low.

PROVISION FOR CURRENT TAX AND DERERRED TAX

Provision for current tax has been made as per the prevailing income tax rates and Provision for Deferred Tax Assets has been calculated in terms of newly issued accounting standard interpretation (ASI) No-5 along with ASI-3 and AS-22 issued by the ICAI.

B. OTHER NOTES

1) The company has not made any provision for gratuity as none of the employees is eligible for gratuity as per the information provided. The rules of Provident Fund and ESI act is not applicable on the company; hence the company has not deducted and deposited any ESI and Provident Fund on behalf of its employees, hence AS-15 is not applicable on the company.

2) The company has not acquired any fixed assets on which it has availed any loan from the banks, hence the capitalization of the borrowing costs as stated under AS-16 is not applicable on the company.(AS-16).

3) Investments as shown in the balance sheet are at cost. Their present market values are not ascertainable. The company has not received any dividend, interest or rent from the companies in which it had made investments. The company has received share of profit/Loss from M/s. LWS Knitwear, a partnership concern in which the company is one of the partner. (AS-13).

4) The company has not made any foreign currency transactions during the year, hence AS-11 is not applicable on the company.

5) The company has made investments in LWS Knitwear, a partnership concern and Sh. Girish Kapoor, Mg. Director of the company is one of the partners.

6) The company has not received any grant or subsidy form Government of India during the year.

7) The company is a partner in LWS Knitwear. The information required by the Schedule VI of the Companies Act, 1956 in this regard is given as below :

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Mar 31, 2013

GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards.

REVENUE RECOGNITION

Expenses and incomes considered payable and receivable respectively are accounted for on accrual basis.

FIXED ASSETS

The Fixed assets are stated at Historical Cost less depreciation.

DEPRECIATION

Depreciation on fixed assets has been provided as per SLM Method of Companies Act 1956.

METHOD OF ACCOUNTING

The company has adopted mercantile system of accounting.

VALUATION OF INVENTORIES

Store & Spares are valued and certified by the management. As per their views the stocks are valued at cost or net realisable value whichever is low.

PROVISION FOR CURRENT TAX AND DERERRED TAX

Provision for current tax has been made as per the prevailing income tax rates and Provision for Deferred Tax Assets has been calculated in terms of newly issued accounting standard interpretation (ASI) No-5 along with ASI-3 and AS-22 issued by the ICAI.

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Mar 31, 2010

GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards.

REVENUE RECOGNITION

Expenses and incomes considered payable and receivable respectively are accounted for on accrual basis.

FIXED ASSETS.

The Fixed assets are stated at Historical Cost less depreciation.

DEPRECIATION

Depreciation on fixed assets has been provided as per SLM Method of Companies Act 1956.

METHOD OF ACCOUNTING

The company has adopted mercantile system of accounting.

VALUATION OF INVENTORIES

The company has not maintained any stock records, hence we relied upon the Valuations provided by the management. Inventories of Raw Material, Stock in Process, Finished Goods and store & spares are valued and certified by the management. As per their views the stocks are valued at cost or net realisable value whichever is low, stock of waste is valued at realisable value. While calculating the valuation of stocks, FIFO Method has been adopted by the company.

PROVISION FOR CURRENT TAX AND DERERRED TAX

Provision for current tax has been made as per the prevailing income tax rates.

Deferred Tax resulting from "Timing Differences" between book and taxable profits is accounted for using the tax rates and laws that have been enacted or subsequently enacted on the Balance sheet date. The deferred tax assets is recognised and carried forward only on the extent that there is a reasonable certainty that assets will be realised in future.

During the year, Deferred Tax Assets has not been accounted for on the losses brought forward as there is no hope that the company will earn profits in the coming years in terms of newly issued accounting standard interpretation (ASI) No-5 along with ASI-3 and AS-22 issued by the ICAI.

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Mar 31, 2009

GENERAL

(i) These accounts are prepared on the historical cost basis and on the accounting principles of going concern.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles and mandatory Accounting Standards.

REVENUE RECOGNITION

Expenses and incomes considered payable and receivable respectively are accounted for on accrual basis.

FIXED ASSETS.

The Fixed assets are stated at Historical Cost less depreciation.

DEPRECIATION

Depreciation on fixed assets has not been provided as there was no commercial activities in the company.

METHOD OF ACCOUNTING

The company has adopted mercantile system of accounting.

VALUATION OF INVENTORIES

The company has not maintained any stock, records, hence we relied upon the valuations provided by the management. Inventories of Raw Material, Stock in Process, Finished Goods and store & spares are valued and certified by the management. As per their views the stocks are valued at cost or net realisable value whichever is low, stock of waste is valued at realisable value. While calculating the valuation of stocks, FIFO Method has been adopted by the company.

PROVISION FOR CURRENT TAX AND DERERR^D TAX

No provision for current tax has been nrnferas^afler the adjustments of the brought forward losses, no tax liability arises.

Deferred Tax resulting from "Timing Differences" between book and taxable profits is accounted for using the tax rates and laws that have been enacted or subsequently enacted on the Balance sheet date. The deferred tax assets is recognised and carried forward only on the extent that there is a reasonable certainty that assets will be realised in future.

During the year, Deferred Tax Assets has not been accounted for on the losses brought forward as there is no hope that the company will earn profits in the coming years in terms of newly issued accounting standard interpretation (ASI) No-5 along with ASI-3 and AS-22 issued by the ICAI.