The following discussion of our financial condition and results of operations is based on and should be read in conjunction with our Restated Consolidated and Standalone Financial Information (including the schedules, notes and material accounting policies thereto), included in the section titled Restated Consolidated and Standalone
Financial Information and Summary of Financial Information beginning on page 288 & 77 of this Red Herring Prospectus.
Unless otherwise indicated or the context otherwise requires, the financial information for the Fiscal 2026, Fiscal 2025 and Fiscal 2024, included herein is based on or derived from our Restated Consolidated and Standalone Financial Information included in this Red Herring Prospectus.
Ind AS differs in certain material respects from IFRS and U.S. GAAP and other accounting principles with which prospective investors may be familiar. Accordingly, the degree to which the financial statements prepared in accordance with Ind AS included in this Red Herring Prospectus will provide meaningful information, is entirely dependent on the readers level of familiarity with Ind AS accounting policies. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial information included in this Red Herring Prospectus, nor do we provide a reconciliation of our financial information to IFRS or U.S. GAAP. Any reliance by persons not familiar with Ind AS accounting policies on the financial disclosures presented in this Red Herring Prospectus should accordingly be limited.
Our Companys Fiscal commences on April 01 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year.
Some of the information contained in this section, contain forward-looking statements that involve risks and uncertainties. Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those forward-looking statements. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by us or any other person, or that these results will be achieved or are likely to be achieved. You should read the section titled Forward-Looking Statements beginning on page 25 of this Red Herring Prospectus for a discussion of the risks and uncertainties related to those statements and, also the section titled Risk Factors and Our Business beginning on pages 27 and 219, respectively, of this Red Herring Prospectus for a discussion of certain factors that may affect our business, results of operations and financial condition. The actual results of the Company may differ materially from those expressed in or implied by these forward-looking statements.
Unless otherwise indicated, industry and market data used in this section has been derived from the report titled
Research Report on Textile Sector in India issued by CARE ( CARE Report ). We commissioned the CARE Report on June 3, 2026 and paid an agreed fee for the purposes of confirming our understanding of the industry exclusively in connection with the Issue. Further, a copy of the CARE Report shall be available on the website of our Company at www.alpinetexworld.com in compliance with applicable laws. The data included herein includes excerpts from the CARE Report and may have been re-ordered by us for the purposes of presentation. There are no parts, data or information (which may be relevant for the proposed Issue), that have been left out or changed in any material manner. The CARE Report is not a recommendation to invest or disinvest in any company covered in the report. The views expressed in the CARE Report are that of issuer of the CARE Report. Prospective investors are advised not to unduly rely on the CARE Report. Unless otherwise indicated, all financial, operational, industry and other related information derived from the CARE Report and included herein with respect to any particular year refers to such information for the relevant calendar year. For further information, please see Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of Presentation Industry and Market Data and Risk Factor 56 - Industry information included in this Red Herring Prospectus has been derived from an industry report prepared by CARE exclusively commissioned and paid for by us for such purpose and reliance on such information for making an investment decision in the Issue is subject to certain inherent risks. on page 61 .
Unless otherwise stated, references to the Company, our Company, we, us, and our are to Alpine Texworld Limited (formerly known as Alpine Spinweave Limited).
Business Overview
Our Company, incorporated in February 2016 and commenced its production in April 2017 with commencement of its weaving unit including the sizing plant at Block No. 614-1105, Village-Paldi, Pirana Miroli Road, Paldi Kankaj, Ahmedabad, Dascroi, Gujarat, India, 382425 ( Manufacturing Unit 1 ). Subsequently, in March 2025, the Company expanded its manufacturing unit by commencing its spinning unit at Block no. 1105, Old Block no. 614 (Old Survey no. 306), Mouje Paldi Kankaj. Taluka Dascroi, Dist Ahmedabad, Ahmedabad - 11 (Aslali)
( Manufacturing Unit 2 ). The Manufacturing Unit 2 is obtained on a leasehold basis from one of its group company, Alpine Weaving Private Limited and the same is situated adjacent to Manufacturing Unit 1. The decision to establish the proposed spinning plant at Manufacturing Unit 2 ensures operational synergies and management efficiencies with our existing Manufacturing Unit 1. The Manufacturing Unit 1 and Manufacturing Unit 2 collectively includes main building sheds, effluent treatment plants, boiler foundations, machineries, office spaces, raw material storage areas, electrical rooms, water tanks, coal yards, and other auxiliary structures.
Our Company has grown into a vertically integrated textile manufacturer with capabilities in weaving and spinning. Our Company procures processed cotton which is subject to open-end spinning, resulting in Yarns of varying thicknesses. The Yarns are then woven into Grey Fabric using looms. We have outlined the detailed process in our Chapter, Our Business Manufacturing/Production Process on page 232.
Our Company had installed a rooftop solar plant at (i) Manufacturing Unit 1 with a capacity of 820 KW of solar energy in January 2024 ( Solar Unit 1 ), and (ii) Manufacturing Unit 2 with a capacity of 475 KW of solar energy in November 2025 ( Solar Unit 3 ). In addition to the rooftop solar panels, our Company has installed ground mounted solar panels at Survey No., 216 (Old Survey No. - 51/2), Khata No. 190, Village - Makhanu, Taluka - Deodar, District Banaskantha and Survey No., 221 (Old Survey No. - 51/1), Khata No. 190, Village - Makhanu, Taluka - Deodar, District Banaskantha ( Solar Unit 2 ) in March 2025 with a capacity of 5.4 megawatts and in April 2026 with an additional capacity of 3.6 megawatts of solar energy, which has further reduced dependency on grid power and promoted cost efficiency. The generated electricity offsets our Companys power consumption, with Uttar Gujarat Vij Company Limited adjusting the same against energy bills.
Our key performance indicators for the Fiscals 2026, 2025 and 2024 as per Restated Consolidated and Standalone Financial Information are as follows:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| Revenue from Operations ( in million) (1) | 3,427.13 | 2,373.24 | 1,836.03 |
| Gross Profit ( in million) (2) | 923.23 | 578.82 | 451.85 |
| Gross Profit Margin (%) (3) | 27.20% | 24.39% | 24.61% |
| EBITDA ( in million) (4) | 474.48 | 270.00 | 199.06 |
| EBITDA Margin (%) (5) | 13.84% | 11.38% | 10.84% |
| Profit After Tax ( in million) (6) | 217.16 | 86.26 | 48.81 |
| PAT Margin (%) (7) | 6.34% | 3.63% | 2.66% |
| RoCE (%) (8) | 17.56% | 12.18% | 12.12% |
| RoE (%) (9) | 33.85% | 18.08% | 12.17% |
| Debt to Equity Ratio (10) | 2.35 | 3.14 | 1.80 |
Notes:
1) Revenue from Operations means the Revenue from Operations as appearing in the Restated Consolidated and Standalone Financial Information.
2) Gross Profit is calculated from the revenue from operations as reduced by Cost of materials consumed, Purchase of traded goods and Changes in inventories of finished goods and work-in-progress.
3) Gross Profit Margin is calculated as Gross Profit divided by Revenue from Operations.
4) EBITDA is calculated as Restated Profit Before Exceptional Items and Tax added by finance costs and depreciation and amortization expenses reduced by other income.
5) EBITDA Margin (%) is calculated as EBITDA divided by Revenue from Operations.
6) Profit After Tax Means Profit for the year.
7) PAT Margin (%) is calculated as Profit After Tax as a percentage of Revenue from Operations.
8) RoCE (Return on Capital Employed) (%) is calculated as earnings before interest and taxes (Profit Before Exceptional Items and Tax added by Interest Expense/finance costs) divided by average capital employed ((Opening capital employed + Closing capital employed) / 2). Capital Employed includes Total equity, Long-Term Borrowing & Short-Term Borrowing, Deferred Tax Assets / Liabilities, Lease Liabilities reduced by Right of Use Asset.
9) RoE (Return on Equity) (%) is calculated as profit after tax for the year / period divided by Average Total Equity ((Opening Total Equity
+ Closing Total Equity) / 2).
10) Debt to Equity Ratio is calculated as Total debt divided by Total equity where total debt refers to sum of current & non-current borrowings.
Note: The figures above have been certified by our Statutory Auditors, M/s Suresh Chandra & Associates, Chartered Accountants vide their certificate dated June 8, 2026 having UDIN: 26128896BZRKBJ7050.
Operational Key Performance Indicators (KPIs) of our Company and Subsidiary
| Particulars | For the year ended on | ||
| March 31, 2026 | March 31, 2025 | March 31, 2024 | |
| Consolidated | Consolidated | Standalone | |
| Average Capacity Utilization (%) | |||
| Weaving units ** | 107.30 * | 106.51 * | 95.41 |
| Spinning unit | 88.50 | - | - |
| Production quantity | |||
| Weaving units ** (metres in lakhs) | 296.15 | 293.96 # | 171.74 |
| Spinning unit (metric tons) | 5,309.84 | $ - | - |
# Actual production of the Company has been considered on an actual basis, whereas the production of the subsidiary has been annualised based on the production undertaken on or after October 29, 2024. $ The Company has commenced operations for Manufacturing Unit 2 from March 28, 2025, however, given the minimal scale of production, the same has not been considered in the above table. *Variation in the number of picks inserted during production process results in a corresponding variation in the production output. Accordingly, the actual production achieved may differ from the installed production output on account of such variations. In line with the above, during Fiscals 2025 and 2026, the Company on consolidated level has recorded higher production output as compared to its installed capacity.
** Weaving units refer to Manufacturing Unit 1 and manufacturing unit of subsidiary.
Notes:
1) Average capacity utilization is calculated from dividing the actual production by installed capacity for respective period.
2) The figures above have been certified by our Statutory Auditors, M/s Suresh Chandra & Associates, Chartered Accountants vide their certificate dated June 8, 2026 having UDIN: 26128896BZRKBJ7050.
For reconciliation in relation to the Gross Profit, Gross Profit Margin, EBITDA, EBITDA Margin, PAT Margin, Return on Equity, Return on Capital Employed, and Debt to Equity ratio for Non-GAAP measures, see
Managements Discussions and Analysis of Financial Condition and Results of Operation Non-GAAP Measures on page 376 .
Principal Factors Affecting our Results of Operations and Financial Condition
Our results of operations have been, and will continue to be, affected by number of events and actions, some of which are beyond our control. However, there are some specific items that we believe have impacted our results of operations and, in some cases, will continue to impact our results. We believe that the following factors, amongst others, have, or could have an impact on these results, the manner in which we generate income and incur the expenses associated with generating this income.
Raw Material Costs and Operating Costs
Our Business, financial condition, results of operations and prospects are significantly impacted by the prices of raw materials purchased by us, particularly prices of cotton Yarn & cotton. The cost of materials consumed of raw material was 2,547.10 million, 1,720.25 million and 1,404.37 million, in the Fiscal 2026, Fiscal 2025 and Fiscal 2024 which represented 78.79%, 76.18% and 79.00%, of our total expense for the respective periods. Raw material pricing can be volatile due to a number of factors beyond our control, including global demand and supply, general economic and political conditions, transportation and labour costs, labour unrest, natural disasters, competition and fuel prices. Our cash flows may be impacted by the amount of raw materials procured and the price at which we procure these raw materials, which may fluctuate from time to time.
Further, as on the date of this Red Herring Prospectus, our suppliers of our raw material, cotton Yarn and Cotton, are predominantly based in Gujarat. A decrease in business from our suppliers due to any adverse market conditions or the economic environment generally prevailing in the state, may adversely affect our business, results of operations, cash flows and financial condition.
Our ability to manage our operating costs and operations efficiencies is critical to maintaining our competitiveness and profitability. Our profitability is partially dependent on our ability to increase our productivity and reduce our operating expenses.
Availability of funds for capital expenditure
We purchase machinery and equipment on an ongoing basis to expand our capacities as well as capabilities to seize opportunities for growth in the market.
In the Fiscal 2026 and Fiscal 2025, our capital expenditure (i.e., capitalisation of property, plant and equipment and outstanding capital work-in-progress) was 342.39 million and 638.48 million, respectively while our gross block (i.e., cost of property, plant and equipment and capital work-in-progress) as at March 31, 2026 and March 31, 2025 was 1,840.65 million and 1,553.16 million. Around 18.60% and 41.11% of our gross block as at March 31, 2026 and March 31, 2025, respectively, was a result of our capital expenditure made in the Fiscal 2026 and the Fiscal 2025. The capital expenditure for work in progress in Fiscal 2026 and Fiscal 2025 was 156.76 million and 259.12 million, respectively, out of which 12.65 million was fully capitalised during Fiscal 2026 and 246.48 million which was fully capitalised during the Fiscal 2025. Our Manufacturing Unit 1 was established in Fiscal 2018 and currently has an annual installed capacity of 180 lakhs metres with 112 high-speed Toyota shuttleless Air jet looms and further, Manufacturing Unit 2 was established in Fiscal 2025 which has an annual installed capacity of spinning 6000 metric tonnes of Yarn. Our Company installed in Fiscal 2024 a rooftop solar plant at Solar Unit 1 with a capacity of 820 KW and in Fiscal 2026 a rooftop solar plant at Solar Unit 3 with a capacity of 475 KW. In addition to that, in March 2025 and April 2026, our Company installed ground mounted solar panels at Solar Unit 2 with a capacity of 5.4 megawatts and 3.6 megawatts respectively of solar energy.
Following table states the capital expenditure made by the company in reporting period in comparison with the amount of gross block in that particular year.
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| Capital expenditure* ( in million) | 342.39 | 638.48 | 46.78 |
| % of Gross Block (in %) | 18.60% | 41.09% | 8.67% |
We believe by leveraging our position in the evolving textile market, we stand to enhance our market share and drive growth in the coming years, see Our Business Manufacturing units and Our Business Our Strategies Manufacturing Capabilities on pages 230 and 230.
We use a combination of internal accruals and debt financing for our expansion plans. We intend to use 307.11 million from the net proceeds from the Issue for further capital expenditure. The actual amount and timing of our future capital expenditure may deviate from initial estimates due to various factors including unforeseen delays or cost over-runs, unanticipated expenses, regulatory changes, economic conditions, technological advancements, and emerging market developments and opportunities in the sectors we focus on.
Loss of our suppliers or failure by our suppliers to deliver some of our raw materials
Our ability to remain profitable depends, in part, on our ability to source and maintain a stable and sufficient supply of raw materials at acceptable prices. For procurement of our raw material, we have not entered into long term contracts with suppliers. For further details see Risk Factor - 17 - We are primarily dependent upon top 10 suppliers for procurement of raw materials and purchase of traded goods for the Fiscal 2026, Fiscal 2025 and Fiscal 2024 which amounted to 1,754.23 million, 1,589.44 million and 1,178.15 million and accounted for 64.26%, 82.76% and 81.43% of our total purchases of raw material and traded goods for the respective years, with whom we do not have any firm commitments. Any disruption in the supply of these goods or fluctuations in their prices, inter alia, due to seasonality of cultivation of cotton could have a material adverse effect on our business operations and financial conditions on page 39.
The success of our business is significantly dependent on maintaining good relationships with our raw material suppliers. Absence of long-term supply contracts subjects us to risks such as price volatility caused by various factors such as commodity market fluctuations, climatic and environmental conditions, production and transportation cost, changes in government policies, and regulatory and trade sanctions Additionally, our inability to predict the market conditions may result in us placing supply orders for inadequate quantities of such raw materials. Loss of any of our suppliers or a failure by our suppliers to deliver some of our raw materials have an adverse impact on our ability to continue our manufacturing process without interruption and our ability to manufacture and deliver the products to our customers without any delay. Further, restrictions on import of raw materials and an increase in shipment cost may adversely impact our business and results of operations.
Other Operating Income Subsidy Income
We obtain subsidy income (Other Operating Income) through Net SGST refunded by the state government under the Incentive scheme by the state government, to support the operational costs and financial performance. This subsidy has historically contributed to the cost management and enhanced the Companys competitiveness. The
Companys EBIDTA margins may be impacted in the event such subsidy is revoked. We set out below a tabular representation setting out EBITDA and EBITDA margins both including and excluding the subsidy:
| Particulars | For the Year Ended | ||
| March 31, 2026 | March 31, 2025 | March 31, 2024 | |
| Consolidated | Consolidated | Standalone | |
| EBITDA | 474.48 | 270.00 | 199.06 |
| ( in million) (1) | |||
| EBITDA Margin (%) (2) | 13.84% | 11.38% | 10.84% |
| EBITDA excluding Other | 434.12 | 234.03 | 156.29 |
| Operating Income ( in | |||
| million) (3) | |||
| EBITDA Margin excluding | 12.82% | 10.01% | 8.72% |
| Other Operating Income (%) (4) |
Notes:
1. EBITDA is calculated as Restated Profit Before Exceptional Items and Tax added by finance costs and depreciation and amortization expenses reduced by other income.
2. EBITDA Margin (%) is calculated as EBITDA divided by Revenue from Operations.
3. EBITDA excluding other operating income is calculated as Restated Profit Before Exceptional Items and Tax added by finance costs and depreciation and amortization expenses reduced by other income and other operating income.
4. EBITDA Margin excluding other operating income (%) is calculated as EBITDA divided by Revenue from Operations reduced by other operating income.
Competition
We face competition in all our main business lines. Since our business is competitive, some of our key competitors that have diversified businesses, may have greater resources and offer a broader range of products than ours. Such competitors may also have longer operating histories, greater financial, technical, product development, marketing resources and greater brand recognition. Such competitors could use these resources to market or develop their products that are more effective or less costly than our products or that could render any or all of our products obsolete. Competitive pressure could also affect the pricing of our products. Greater competition for particular products could have a negative impact on pricing. Our success is dependent upon our ability to compete against such competitors. We will continue to seek to distinguish our offerings by providing quality products at competitive prices.
1 Material accounting policies :
1.1 Statement of Compliances and Basis of Preparation
Statement of compliance
We have examined the attached Restated Consolidated and Standalone Financial Information of Alpine
Texworld Limited (Formerly known as Alpine Spinweave Limited), ( The Parent Company or Company ) and its subsidiary Alpine Cottweave LLP (Collectively referred as Group ) comprising the restated consolidated statement of assets and liabilities as at March 31, 2026 and March 31, 2025 and restated standalone statement of assets and liabilities as at March 31, 2024, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated statement of changes in equity, the restated consolidated statement of cash flow for the financial years ended March 31, 2026 and March 31, 2025 and the restated standalone statement of profit and loss (including other comprehensive income), the restated standalone statement of changes in equity, the restated standalone statement of cash flow for the financial years ended March 31, 2024, the summary statement of material accounting policies, and other explanatory notes (collectively, the ( Restated Consolidated and Standalone Financial Information or RCSFI ), as approved by the Board of Directors of the Group at their meeting held on June 2, 2026 for the purpose of inclusion in the Red Herring Prospectus ( RHP )
/ Prospectus prepared by the board in connection with its proposed Initial Public Offer of equity shares
( IPO ) prepared in terms of the requirements of:
(a) Section 26 of Part I of Chapter III of the Companies Act 2013 (the Act );
(b) Relevant provisions of The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the SEBI ICDR Regulations ) issued by the Securities and Exchange Board of India ( SEBI ) on September 1 1, 2018, as amended from time to time in pursuance of the Securities and Exchange Board of India Act, 1992.
(c) The Guidance Note on Reports in the Group Prospectuses (Revised 2019) (as amended) issued by the Institute of Chartered Accountants of India ( ICAI ), (the Guidance Note ).
Basis of Preparation
These Restated Consolidated and Standalone Financial Information have been compiled from
(i) Audited Consolidated Financial Statements of the Company as at and for the year ended 31 March 2026 prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) to the extent applicable, and the presentation requirements of the Rules, 2015 as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013 which have been approved by the Board of Directors at their meeting held on June 2, 2026.
(ii) Audited Consolidated Financial Statements of the Company as at and for the year ended 31 March 2025 prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) to the extent applicable, and the presentation requirements of the Rules, 2015 as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013 which have been approved by the Board of Directors at their meeting held on 29 th August, 2025.
The Consolidated financial statement for the year ended March 31, 2025 is the first set of Financial Statements prepared in accordance with the requirements of IND AS 101 - First time adoption of Indian Accounting Standards. Accordingly, the transition date to IND AS was 1 st April 2023. The transition to Ind AS has been carried out from Accounting Standards notified under section 133 of the companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 ( Indian GAAP or Previous GAAP ). Refer to refer Note 45, 46 and 47 to Annexure V of Restated Consolidated and Standalone Financial Information for detailed information on how the Company transitioned to Ind AS.
The Restated Consolidated and Standalone Financial Information have been prepared on the historical cost basis as explained in the accounting policies below, except certain financial assets and liabilities which are measured at fair value where the Ind AS requires a different accounting treatment (refer accounting policy regarding financial instruments).
The preparation of these Restated Consolidated and Standalone Financial Information requires the use of certain critical accounting estimates and judgements. It also requires the management to exercise judgement in the process of applying the Companys accounting policies. The areas where estimates are significant to the Restated Consolidated and Standalone Financial Information, or areas involving a higher degree of judgement or complexity, are disclosed in second para of item no 1.6 of Note -1 of Annexure - V.
1.2 Basis of Consolidation
The Restated Consolidated and Standalone Financial Information comprise the financial statements of the Parent Company and its subsidiary. Our Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the Restated Consolidated and Standalone Financial Information from the date the Company gains control until the date the Parent Company ceases to control the subsidiary.
Restated Consolidated and Standalone Financial Information are prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a subsidiary of the Company uses accounting policies other than those adopted in the Restated Consolidated and Standalone Financial Information for like transactions and events in similar circumstances, appropriate adjustments are made to that the subsidiary financial statements in preparing the Restated Consolidated and Standalone Financial Information to ensure conformity with the Company accounting policies.
Consolidation procedure :
1. Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiary. For this purpose, income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognized in the Restated Consolidated and Standalone Financial Information at the acquisition date.
2. Eliminate the carrying amount of the parents investment in subsidiary and the parents portion of equity of subsidiary. business combinations policy explains how to account for any related goodwill/common control adjustment deficit account.
3. Eliminate in full Intra Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the Group.
1.3 Functional and presentation currency
The RCSFI are presented in Indian Rupee (INR), which is also the companys functional currency.
All amounts included in the RCSFI are reported in Rupees except shares and per share data unless otherwise stated, due to rounding off the numbers presented throughout the document may not add up precisely to the totals and percentage may not precisely reflect the absolute figures.
1.4 Fair value measurement
Fair value is the price at the measurement date at which an asset can be sold or paid to transfer a liability, in an orderly transaction between market participants. The Companys accounting policies require measurement of certain financial / non-financial assets and liabilities at fair values (either on a recurring or non-recurring basis). Also, the fair values of financial instruments measured at amortised cost are required to be disclosed in the said RCSFI.
The Company is required to classify the fair valuation method of the financial / non-financial assets and liabilities either measured or disclosed at fair value in the financial statement using a three-level fair value hierarchy (which reflects the significance of inputs used in the measurement). Accordingly, the company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of un-observable inputs.
The three levels of the fair value hierarchy are described below:
Level-1 : Quoted (unadjusted) prices for identical assets or liabilities in active markets.
Level-2 : Significant inputs to the fair value measurement are directly or indirectly observable. Level-3 : Significant inputs to the fair value measurement are unobservable.
At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Companys accounting policies. 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.
1.5 Current versus non-current classification
The Company presents assets and liabilities in the Balance sheet of RCSFI based on current/non- current classification.
An asset is classified 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 year, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting year.
A liability is classified 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 year, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting year.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1.6 Use of Estimates
The estimates used in the preparation of the said RCSFI are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events), that the Company believes to be reasonable under the existing circumstances. The said estimates are based on the facts and events which existed as at the reporting date or that occurred after that date but provide additional evidence about conditions existing as at the reporting date. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates - even if the assumptions underlying such estimates were reasonable when made, if these results differ from historical experience or other assumptions do not turn out to be substantially accurate. The changes in estimates are recognized in the RCSFI in the year in which they become known.
Assumptions and estimation uncertainties
Accounting estimates and underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognised in the period in which the estimates are changed and in any future periods affected. Information about critical judgments made in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following accounting policies.
a) Measurement and likelihood of occurrence of provisions and contingencies b) Impairment of financial / non-financial assets c) Recognition of Deferred tax assets d) Defined benefit plans and compensated absences. e) Useful lives of property, plant, and equipment f) Expected credit losses on financial assets.
1.7 Summary of significant accounting policies (i) Property, Plant and Equipment (PPE) Recognition and measurement :
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognised as of April l, 2023, measured as per the previous GAAP and use that carrying value as the deemed cost of property, plant, and equipment.
Freehold land is carried at cost.
Property, plant and equipment held for use in the production or/and supply of goods are stated in the balance sheet at cost, less any accumulated depreciation and sale or disposal (if any).
Cost of an item of Property, plant and equipment acquired comprises its purchase price after deducting any trade discounts and rebates and further includes any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.
In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use, and estimated cost of dismantling and removing the item and restoring the site on which it is located. The costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location and condition are also added to the cost of self-constructed assets.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
An item of property, plant, and equipment (PPE) is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any resulting gain or loss from the derecognition is calculated as the difference between the assets carrying amount and the net disposal proceeds, and is recognised in the Statement of Profit and Loss.
Subsequent measurement :
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
(ii) Intangible Assets
Recognition and measurement :
Intangible asset purchased are measured at cost less accumulated amortization and accumulated impairment, if any and are amortized as per the useful life on written down value basis, as per the rates specified in the Companies Act, 2013.
Subsequent measurement :
Subsequent expenditure is capitalised only if it is probable that the future economic benefit associated with the expenditure will flow to the Company.
(iii) Depreciation methods, estimated useful lives and residual value
Depreciation is provided using straight line method (SLM) as specified schedule II of the companies Act 2013. Depreciation on assets acquired / disposed-off during the year if any, is provided on pro-rata basis with reference to the date of addition / disposal. The estimated useful lives of assets are as under:
| Class of assets | Useful Life |
| Freehold Land | Non-Depreciable |
| Building | 30 Years |
| Plant & Machinery | 15 Years |
| Electrification | 10 Years |
| Furniture & Fixtures | 10 Years |
| Office Equipment | 5 Years |
| Vehicles | 10 Years |
| Computers | 3 Years |
| Intangible Asset | 5 Years |
The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
(iv) Capital Advances
Advances paid towards the acquisition of property, plant and equipment, outstanding at each balance sheet date is classified as capital advances under other non-current assets .
(v) Capital work in process
Unallocated expenditures in capital work in progress ( CWIP ) refer to costs incurred during the construction or development of an asset that are not yet assigned to a specific asset. Such expenditures may include overheads, related expenses, or preliminary project costs.
Unallocated expenditures in CWIP are treated as part of the cost of an asset until it is ready for intended use. Costs that cannot be directly attributed to specific assets are accumulated in CWIP and allocated when the assets are completed and become operational.
(vi) Inventories
Inventories of Raw Materials, Work-in-Progress, Stores and spares, Finished Goods and Stock-in-trade are stated at cost or net realisable value, whichever is lower except for Waste / Scrap which are valued at net realisable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are First-in-First-out. Specific identification, as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
(vii) Segment Reporting
Based on the Management Approach as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the performance and allocates resources based on an analysis of various performance indicators by business segments. The Managing Director (MD) has been identified as CODM.
The Company has evaluated the requirements of Ind AS 108 and determined that it does not have any distinct segments that meet the criteria for separate disclosure. As a result, segment reporting is not applicable.
(viii) Borrowings
Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
(ix) Borrowing costs
Borrowing cost directly attributable to the acquisition, construction of qualifying asset that necessarily takes a substantial period of time to get ready for its intended use, capitalised as part of cost of asset. The borrowing costs includes interest and transaction cost that a The Company incurs in connection with the borrowing of the funds. Other interest and borrowing costs are charged to Statement of Profit and Loss.
(x) Provisions and contingent liabilities
Provisions are recognised when The Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of managements best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
Contingent liability is disclosed in the case of:
(a) A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation; (b) A present obligation arising from the past events, when no reliable estimate is possible; (c) A possible obligation arising from the past events, unless the probability of outflow of resources is remote.
Provisions and contingent liabilities are reviewed at each balance sheet date.
(xi) Revenue recognition
The specific recognition criteria from various streams of revenue are described as under:
(i) Sales of Goods and Services :
The revenue is recognised upon transfer of control of promised product to the customer in an amount that reflect the consideration, which The Company expect to receive in exchange of product. The revenue is measured based on the transaction price, which is the consideration, adjusted for discount and other incentives if any. The Amount of consideration to which The Company expect to be entitled in exchange for transferring promised goods to a customer excluding amounts collected on behalf of third parties (Duties & Taxes on behalf of Government).
(ii) Other Income :
Interest income is accrued on a time basis, by reference to the principal outstanding amount and at the effective interest rate applicable, the future cash receipt through the expected life of the financial asset to that assets carrying amount on initial recognition.
Other Income includes (i) Interest Income (ii) Foreign Exchange Gain (iii) Dividend Income (iv) Interest Subsidy (v) Subsidy on Electricity Duty & Consumption
(iii) Government Grants / Subsidies from the Government :
Subsidies from the Government are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the subsidies will be received or when actually received by the Company. Subsidies from the Government are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the subsidies are intended to compensate.
Subsidies from the Government that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which there is reasonable certainity of receiving the same.
Government grants of the nature of contribution towards capital expenditure (to the extent utilized in the year) are treated as of capital fund or reduced from the cost of PPE. Unutilized government grants are treated as funds to be carried forward and refunded, as per government directions and exhibited as a liability. Income from Subsidy / Government Grant includes the following:
Subsidy income of net SGST refunded by the State Government under the incentive scheme for Industries
Interest Subsidy
Subsidy on Electricity Duty & Consumption
(xii) Employee benefits
(a) Defined Contribution Plans
Payments made to a defined contribution plan such as Provident Fund and Family Pension maintained with Regional Provident Fund Office are charged as an expense in the Statement of Profit and Loss as they fall due.
(b) Defined Benefit Plans
Defined benefit Plan
The Companys liability towards gratuity to past employees is determined using the Projected Unit Credit
Method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized immediately in the Statement of Profit and Loss as expense. Actuarial gain and losses are recognized immediately in the Other Comprehensive income. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities.
Defined Contribution Plan
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in statement of profit or loss in the periods during which the related services are rendered by employees.
(xiii) Income Tax
Current Tax
The income tax expense or credit for the period is the tax payable on the current periods taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses and unabsorbed Depreciations, if any.
Deferred Tax
Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where The Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(xiv) Lease
At inception of a contract, The Company assesses whether a contract is, or contains, a lease. 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.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the lease payments associated with these leases as an expense in the statement of Profit and Loss on a straight-line basis over the lease term.
(a) Right-of Use Assets
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
(b) Lease Liabilities
The lease liability is initially measured at the present value of the lease payments to be paid over the lease term at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Companys incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. Subsequently, the lease liability is measured at amortised cost using the effective interest method. Modifications to a lease agreement beyond the original terms and conditions are generally accounted for as a re-measurement of the lease liability with a corresponding adjustment to the ROU asset. Any gain or loss on modification is recognized in the Statement of Profit & Loss. However, the modifications that increase the scope of the lease by adding the right to use one or more underlying assets at a price commensurate with the stand-alone selling price are accounted for as a separate new lease. In case of lease modifications, discounting rates used for measurement of lease liability and ROU assets is also suitably adjusted.
(xv) Financial Instruments
Financial assets (except for trade receivables) and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities measured at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
A. Financial assets
Initial Recognition and measurement :
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that The Company commits to purchase or sell the asset.
Subsequent measurement :
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification and measurement of financial assets (a) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost using the effective interest rate method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and 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.
(b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if both of the following criteria are met
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and 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.
(c) Financial assets at fair value through profit & loss (FVTPL)
All financial assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.
Impairment of financial assets
The Company assesses at each date of balance sheet whether a financial asset or a company of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance.
In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses on a forward-looking basis. However, if the credit risk on the financial instruments has increased significantly since the initial recognition, then the Company measures lifetime ECL.
ECL impairment loss allowance (or reversal) recognized during the period is recognized under the head
Other Expenses in the statement of Profit and Loss. The Balance Sheet presentation for various financial instruments is described below:
Financial assets measured as at amortised cost
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the Balance Sheet. This allowance reduces the net carrying amount.
Debt instruments measured at FVTPL
Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Change in fair value is taken to the statement of Profit and Loss.
Debt instruments measured at FVTOCI
Since financial assets are already reflected at Fair Value, impairment allowance is not further reduced from its value. Company does not have any Purchased or Originated Credit Impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/origination.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a The Company of similar financial assets) is primarily derecognised (i.e. removed from The Companys balance sheet) when: the right to receive cash flows from the asset have expired, or
The Company has transferred its right 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 either (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.
When The Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, The Company continues to recognise the transferred asset to the extent of The Companys continuing involvement. In that case, The Company also recognises an associated liability. The transferred 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 in its entirety, the difference between the assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the Statement of Profit and Loss if such gain or loss would have otherwise been recognised in the Statement of Profit and Loss on disposal of that financial asset.
B. Financial liabilities and equity instruments
(a) Classification as debt or equity
Debt and equity instruments issued by The Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
Financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost (loans and borrowings)
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the effective interest rate (EIR) derecognized process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR derecognized is included as finance costs in the Statement of Profit and Loss.
Trade and other payables are recognized at the transaction cost, which is its fair value, and subsequently measured at amortised cost. Similarly, interest bearing loans, trade credits and borrowings (including bonds) are subsequently measured at amortised cost using effective interest rate method.
Financial liabilities measured at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if these are incurred for the purpose of repurchasing in the near term. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in the Statement of Profit and Loss.
(b) Derecognition of Financial Liability
The Company derecognises financial liabilities when, and only when, The Companys obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in Statement of Profit and Loss.
(c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Other incomes, other then interest and dividend are recognized when the same are due to be received and right to receive such other income is established.
(xvi) Share Capital & Share Premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction net of tax from the proceeds. Par value of the equity share is recorded as share capital and the amount received in excess of the par value is classified as share premium.
(xvii) Foreign currency transactions
Initial recognition
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
Exchange difference
Exchange differences arising on the settlement of monetary items or on reporting monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous Restated summary statements, are recognized as income or as expenses in the year in which they arise except those arising from investments in non-integral operations.
The Companys Restated summary statements are presented in Indian Rupee. The Company determines the functional currency as Indian Rupee on the basis of primary economic environment in which the entity operates
(xviii) Dividend Distribution to equity shareholders
The Company recognizes a liability to make cash distributions to equity holders when the distribution is authorized and the distribution is no longer at the discretion of The Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in other equity along with any tax thereon.
(xix) Statement of cash flows
Statement of Cash flows is being prepared in accordance with the indirect method prescribed in Indian Accounting Standard 7 on Statement of Cash flow, whereby profit for the period 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 from operating, investing, and financing activities of the Company are segregated.
(xx) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less (that are readily convertible to known amounts of cash and cash equivalents and subject to an insignificant risk of changes in value). However, for the purpose of Statement of Cash Flows, in addition to above items, any bank overdrafts / cash credits that are integral part of the companys cash management, are also included as a component of cash and cash equivalents.
(xxi) Earnings per share
Basic earnings per share are calculated by dividing the net profit (PAT) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Earnings considered in ascertaining The Companys earnings per share is the net profit for the period after deducting preference dividends and any attributable tax (if any) thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, Right Shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
(xxii) Rounding Off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest millions as per the requirements of Schedule III, unless otherwise stated.
(xxiii) Recent accounting pronouncements :
Ministry of Corporate Affairs ( MCA ) notifies new standards or amendments to the existing standards under the Companies (Indian Accounting Standards) Rules as amended from time to time. There are no such recently issued standards or amendments to the existing standards for which the impact on the Financial Statements is required to be disclosed.
Non-GAAP Measures
Certain financial measures such as Gross Profit, Gross Profit Margin, EBITDA, EBITDA Margin, PAT Margin, Return on Equity, Return on Capital Employed and Debt to Equity ratio ( Non-GAAP Measures ) presented in this Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with Ind AS or Indian GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP or IFRS and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss)for the years/ period or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS or Indian GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our
Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.
Reconciliation of Revenue from Operations to Gross Profit and Gross Profit Margin
The table below reconciles Revenue from operations for the year / period to Gross Profit. Gross Profit is calculated as the revenue from operations as reduced by Cost of materials consumed, Purchase of traded goods and Changes in inventories of finished goods and work-in-progress.
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Revenue from Operations | 3,427.13 | 2,373.24 | 1,836.03 |
| (A) | |||
| Less : | |||
| Cost of Materials | (2,547.10) | (1,720.25) | (1,404.37) |
| Consumed | |||
| Purchase of traded goods | (40.82) | (125.91) | (6.71) |
| Changes in inventories of | 93.01 | 51.73 | 26.90 |
| finished goods and work- | |||
| in-progress | |||
| Gross Profit (B) | 932.23 | 578.82 | 451.85 |
| Gross Profit Margin (B | 27.20% | 24.39% | 24.61% |
| / A) (%) |
Reconciliation of Restated profit/loss for the year to EBITDA and EBITDA Margin
The table below reconciles Restated profit/ (loss) for the year / period to EBITDA. EBITDA is calculated as Restated Profit Before Exceptional Items and Tax added by finance costs and depreciation and amortization expenses reduced by other income, while EBITDA Margin is calculated as EBITDA divided by revenue from operations.
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Restated Profit Before Exceptional Items and Tax | 268.95 | 118.36 | 66.73 |
| Add: Finance Costs | 153.25 | 90.78 | 85.07 |
| Add: Depreciation and Amortisation Expenses | 126.93 | 64.22 | 55.59 |
| Less: Other Income | (74.65) | (3.36) | (8.33) |
| EBIDTA (A) | 474.48 | 270.00 | 199.06 |
| Revenue from Operations (B) | 3,427.13 | 2,373.24 | 1,836.03 |
| EBIDTA Margin (B / A) (%) | 13.84% | 11.38% | 10.84% |
Reconciliation of profit/loss for the year to PAT Margin
The table below reconciles Profit for the year to PAT Margin. PAT Margin is calculated as Profit After Tax as a percentage of Revenue from Operations
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Profit After Tax (A) | 217.16 | 86.26 | 48.81 |
| Revenue From Operations (B) | 3,427.13 | 2,373.24 | 1,836.03 |
| PAT Margin (%) (A / B) | 6.34% | 3.63% | 2.66% |
Reconciliation of Return on Capital Employed
Return on capital employed is calculated as EBIT divided by Average capital employed. EBIT is calculated as Profit Before Exceptional Items and Tax added by Interest Expense/finance costs. Average capital employed = (Opening capital employed + Closing capital employed) / 2). Capital Employed includes Total equity, Long-Term Borrowing & Short-Term Borrowing, Deferred Tax Assets / Liabilities, Lease Liabilities reduced by Right of Use Asset
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Profit Before Tax | 268.95 | 118.36 | 66.73 |
| Add: Finance Cost | 153.25 | 90.78 | 85.07 |
| EBIT : (A) | 422.20 | 209.14 | 151.80 |
| Total Equity | 528.96 | 425.51 | 376.68 |
| Non Current Borrowings | 992.82 | 273.86 | 356.78 |
| Non Current Lease liabilities | 3.65 | - | - |
| Deferred Tax Liabilities (Net) | 38.12 | 14.33 | 17.35 |
| Current Borrowings | 668.08 | 490.80 | 550.63 |
| Current Lease liabilities | 0.37 | - | - |
| Right of Use Asset | (3.48) | - | - |
| Opening Capital Employed (B) | 2,228.52 | 1,204.49 | 1,301.45 |
| Total Equity | 754.13 | 528.96 | 425.51 |
| Non Current Borrowings | 1,064.69 | 992.82 | 273.86 |
| Non Current Lease liabilities | 13.68 | 3.65 | - |
| Deferred Tax Liabilities (Net) | 48.80 | 38.12 | 14.33 |
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Current Borrowings | 711.26 | 668.08 | 490.80 |
| Current Lease liabilities | 0.95 | 0.37 | - |
| Right of Use Asset | (13.67) | (3.48) | - |
| Closing Capital Employed (C) | 2,579.84 | 2,228.52 | 1,204.49 |
| Average Capital Employed | 2,404.18 | 1,716.50 | 1,252.97 |
| [(B + C) / 2] (D) | |||
| Return on Capital employed | 17.56% | 12.18% | 12.12% |
| (A / D) (%) |
Reconciliation of Return on Equity
Return on equity is calculated as profit after tax for the year / period divided by Average Total Equity. The average total equity is calculated as the average of Opening Total Equity and Closing Total Equity.
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Profit After Tax (A) | 217.16 | 86.26 | 48.81 |
| Opening Equity (B) | 528.96 | 425.51 | 376.68 |
| Closing Equity (C) | 754.13 | 528.96 | 425.51 |
| Average Total Equity | 641.54 | 477.23 | 401.10 |
| [(B + C) / 2] (D) | |||
| Return on Equity | 33.85% | 18.08% | 12.17% |
| (A / D) (%) |
Reconciliation of Debt-to-Equity Ratio
The table below reconciles Debt to Equity. Debt to Equity ratio is calculated as total debt for the year/period divided by Total equity where total debt refers to sum of current & non-current borrowings.
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| (in million, unless otherwise stated) | |||
| Non Current Borrowings | 1,064.69 | 992.82 | 273.86 |
| Current Borrowings | 711.26 | 668.08 | 490.80 |
| Total Debt (A) | 1,775.95 | 1,660.90 | 764.66 |
| Total Equity (B) | 754.13 | 528.96 | 425.51 |
| Debt Equity ratio | 2.35 | 3.14 | 1.80 |
| (A / B) |
Result of Our Operations
The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of Company for Fiscal 2026, Fiscal 2025 and Fiscal 2024:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Consolidated | Consolidated | Standalone | ||||
| in | % of Total | in | % of Total | in | % of | |
| Million | Income | Million | Income | million | Total | |
| Income | ||||||
| Income | ||||||
| Revenue from operations | 3,427.13 | 97.87 | 2,373.24 | 99.86 | 1,836.03 | 99.55 |
| Other Income | 74.65 | 2.13 | 3.36 | 0.14 | 8.33 | 0.45 |
| Total Income | 3,501.79 | 100.00 | 2,376.61 | 100.00 | 1,844.36 | 100.00 |
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Consolidated | Consolidated | Standalone | ||||
| in | % of Total | in | % of Total | in | % of | |
| Million | Income | Million | Income | million | Total | |
| Income | ||||||
| Expenses | ||||||
| Cost of material | 2,547.10 | 72.74 | 1,720.25 | 72.38 | 1,404.37 | 76.14 |
| consumed | ||||||
| Purchase of Traded | 40.82 | 1.17 | 125.91 | 5.30 | 6.71 | 0.36 |
| goods | ||||||
| Changes in Inventories | (93.01) | (2.66) | (51.73) | (2.18) | (26.90) | (1.46) |
| Employee benefits | 144.77 | 4.13 | 88.70 | 3.73 | 70.87 | 3.84 |
| expense | ||||||
| Finance Costs | 153.25 | 4.38 | 90.78 | 3.82 | 85.07 | 4.61 |
| Depreciation and | 126.93 | 3.62 | 64.22 | 2.70 | 55.59 | 3.01 |
| amortisation expenses | ||||||
| Other Expenses | 312.98 | 8.94 | 220.12 | 9.26 | 181.92 | 9.86 |
| Total Expenses | 3,232.83 | 92.32 | 2,258.24 | 95.02 | 1,777.63 | 96.38 |
| Restated Profit/(Loss) | 268.95 | 7.68 | 118.36 | 4.98 | 66.73 | 3.62 |
| Before Exceptional | ||||||
| Items and Tax | ||||||
| Exceptional Items | - | - | - | - | ||
| Restated Profit/(Loss) | 268.95 | 7.68 | 118.36 | 4.98 | 66.73 | 3.62 |
| before Tax | ||||||
| Tax expense : | ||||||
| Current tax | 42.09 | 1.20 | 17.95 | 0.76 | 20.96 | 1.14 |
| Deferred Tax | 9.70 | 0.28 | 14.15 | 0.60 | (3.03) | (0.16) |
| Restated | 217.16 | 6.20 | 86.26 | 3.63 | 48.81 | 2.65 |
| Profit/(Loss)after tax | ||||||
| for the Year | ||||||
PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT
INCOME
Total Income
Our total income for the Fiscal 2026 (consolidated), Fiscal 2025 (consolidated) and Fiscal 2024 (standalone), were amounted to 3,501.79 million, 2,376.61 million and 1,844.36 million, respectively. Our total income comprises of:
Revenue from operations
Revenue from operations comprises of income from (i) sale of products and; (ii) sale of services. Sale of products comprises of sale from Grey Fabric and Yarn manufactured, trading of Grey Fabric and yarn; and sale of scrap, whereas sale of services comprises of sizing services. Revenue from operations includes other operating income pertaining to GST Subsidy income.
Set out below is a breakdown of our income from (i) sale of products; and (ii) sale of services, during the Fiscal 2026, Fiscal 2025 and Fiscal 2024:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Consolidated | Consolidated | Standalone | ||||
| Revenue | % of revenue | Revenue | % of revenue | Revenue | % of revenue | |
| from sale ( | from | from sale ( | from | from sale ( | from | |
| in million) | operations | in million) | operations | in million) | operations | |
| Products | ||||||
| Grey Fabric | 3,313.85 | 96.69% | 2,139.97 | 90.17% | 1,728.58 | 94.15% |
| Other Products* | 68.37 | 2.00% | 154.44 | 6.51% | 14.31 | 0.78% |
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Consolidated | Consolidated | Standalone | ||||
| Revenue | % of revenue | Revenue | % of revenue | Revenue | % of revenue | |
| from sale ( | from | from sale ( | from | from sale ( | from | |
| in million) | operations | in million) | operations | in million) | operations | |
| Services (Job Work) | ||||||
| Sizing of Yarn | 4.55 | 0.13% | 42.86 | 1.81% | 50.36 | 2.74% |
| Total | 3,386.77 | 98.82% | 2,337.27 | 98.48% | 1,793.26 | 97.67% |
| *Other Products include trading of Grey Fabric and Yarn; and sale of Scrap. | ||||||
Other income
Other income primarily comprises of interest income on bank / Security deposits, interest and electricity duty subsidy, provisions no longer required that are reversed.
EXPENSES
Total Expenses
Our total expenses for the Fiscal 2026 (consolidated) and the Fiscal 2025 (consolidated) and Fiscal 2024 (standalone), amounted to 3,232.83 million, 2,258.24 million and 1,777.63 million, respectively. Our total expenses primarily consist of the following:
Cost of materials consumed
Cost of materials consumed relates to costs incurred for the raw materials consumed i.e. cotton Yarn and Cotton for manufacturing of finished goods.
Purchase of traded goods
Purchases of traded goods relates to costs incurred for the procurement of Grey Fabric and Yarn, which is directly sold without processing at the facility.
Changes in inventories of finished goods and work-in-progress
Changes in inventories of finished goods and work-in-progress refers to the difference between the opening and closing inventory of Finished Goods and work-in-progress goods for a reporting period.
Employee benefits expense
Employee benefits expenses consist of salaries, wages & bonus, staff welfare expenses, contribution to provident funds and other funds and gratuity expenses.
Finance Costs
Finance costs primarily includes interest expense incurred in relation to short-term and long-term borrowings, interest on lease obligation, interest on partners capital, interest on cash credits, interest on trade credits, other interests and loan processing fees.
Depreciation and Amortization Expenses
Depreciation and amortization expense consists of depreciation on Property, Plant and Equipment, Amortization of right-of-use assets and intangible assets.
Other Expenses
Other expenses is bifurcated into (a) manufacturing cost expenses which includes power & fuel expenses, store & spare consumables, packing material, job work and factory expense and (b) administrative, selling and distribution expenses which include freight expenses, repair and maintenance, insurance, Legal and professional expense Audit fees, travelling and Conveyance expenses, rate and tax expenses, security expenses, rent expenses etc.
Fiscal 2026 (consolidated) compared to Fiscal 2025 (consolidated)
*The financial information for Fiscal 2026 has been presented on a full year consolidated basis, whereas the financial information for Fiscal 2025 is a consolidation where the subsidiary was consolidated for period after acquisition. Accordingly, the figures for the two periods are not strictly comparable, and suitable explanations have been provided wherever relevant.
REVENUE
Total Income
Our total income has increased by 47.34% from 2,376.61 million in Fiscal 2025 to 3,501.79 million in Fiscal 2026 primarily due to an increase in revenue from operations from 2,373.24 million in Fiscal 2025 to 3,427.13 million in Fiscal 2026 and other income increased from 3.36 million in Fiscal 2025 to 74.65 million in Fiscal
2026.
Revenue from operations
Our revenue from operations increased by 44.41% from 2,373.24 million in Fiscal 2025 to 3,427.13 million in Fiscal 2026 primarily due to an increase in the sale of goods from 2,294.41 million in Fiscal 2025 to 3,382.22 million in Fiscal 2026 due to growth in sales and consolidation of subsidiary financial results with those of the Company.
Other income
Our other income increased by 2118.76% from 3.36 million in Fiscal 2025 to 74.65 million in Fiscal 2026, due to receipt of Interest Subsidy and Electricity duty Subsidy in our Subsidiary. For more details, see Subsidies in chapter Our Business on page 238.
EXPENSES
Total Expenses
Our total expenses increased by 43.16% from 2,258.24 million in Fiscal 2025 to 3,232.83 million in Fiscal 2026 primarily due to an increase in (i) in cost of materials consumed, (ii) changes in our inventories of finished goods and work-in-progress, (iii) employee benefit expenses, (iv) finance cost, (v) depreciation and amortization expenses and (v) other expenses.
Cost of Material Consumed
Cost of Material consumed of the company increased by 48.07 % from 1,720.25 million for Fiscal 2025 to 2,547.10 million for Fiscal 2026. The increase was primarily due to increase in procurement of raw material for increased production and consolidation of subsidiary financial results with those of the Company.
Purchase of traded goods
Purchases of stock-in-trade reduced by 67.58% from 125.91 million in the Fiscal 2025 to 40.82 million in Fiscal 2026 primarily due to reduced trading activities.
Changes in inventories of finished goods and work-in-progress
Our changes in inventory of finished goods and work-in-progress was (93.01) million in the Fiscal 2026, while it was (51.73) million in the Fiscal 2025 due to increase in the stock of finished goods and work-in-progress.
Employee benefit expense
Our employee benefit expense increased by 63.21% from 88.70 million in Fiscal 2025 to 144.77 million in Fiscal 2026, due to an increase in salaries, wages and bonus, contribution to provident and other funds of employees from 87.26 million in Fiscal 2025 to 142.49 million in Fiscal 2026 on account of increase in number of employees and consolidation of subsidiary financial results with those of the Company.
Finance costs
Our finance cost increased by 68.82% from 90.78 million in Fiscal 2025 to 153.25 million in Fiscal 2026, primarily due to an increase in our interest expense on cash credit from 33.15 million in Fiscal 2025 to 41.71 million in Fiscal 2026, interest on unsecured loans from 13.03 million in Fiscal 2025 to 28.27 million in Fiscal
2026 and interest on term loans from 37.77 million in Fiscal 2025 to 75.40 million in Fiscal 2026 on account of term loan taken for Manufacturing Unit 2 and consolidation of subsidiary financial results with those of the Company.
Depreciation expense
Our depreciation and amortisation expense increased by 97.65% from 64.22 million in Fiscal 2025 to 126.93 million in Fiscal 2026 due to an increase in gross block from 1540.51 million to 1683.89 million on account of certain additions mainly in, factory building, plant and machinery, electric installations and equipments, computers and charging of depreciation for Manufacturing Unit 2 (spinning unit), Solar Unit 3 (rooftop solar 475 KW) and Solar Unit 2 (ground mounted solar) and consolidation of subsidiary financial results with those of the Company.
Other expenses
Our other expenses increased by 42.18% from 220.12 million in Fiscal 2025 to 312.98 million in Fiscal 2026 due to increase in (i) manufacturing expenses from 192.10 million in Fiscal 2025 to 274.06 million in Fiscal 2026 and (ii) administration, selling and distribution expenses from 28.02 million in Fiscal 2025 to 38.92 million in Fiscal 2026. The increase in manufacturing expenses was primarily due to a increase in (a) power and fuel expenses from 115.43 million in Fiscal 2025 to 147.40 million in Fiscal 2026 as a result of consolidation of subsidiary financial results with those of the Company, (b) job work expenses from 19.98 million in Fiscal 2025 to 61.78 million in Fiscal 2026 and (c) packaging material expenses from 2.79 million in Fiscal 2025 to 15.98 million in Fiscal 2026. The increase in administration, selling & distribution expenses was primarily due to (a) freight expense from 10.44 million in Fiscal 2025 to 14.51 million in Fiscal 2026, (b) insurance expense from 1.48 million in Fiscal 2025 to 3.51 million in Fiscal 2026 and (c) legal and professional expenses from
2.87 million in Fiscal 2025 to 5.95 million in Fiscal 2026.
Profit before tax
On account of the foregoing our profit before tax increased by 127.23% from 118.36 million in Fiscal 2025 to
268.95 million in Fiscal 2026.
Tax expense
Our tax expenses increased by 61.35% from 32.10 million in Fiscal 2025 to 51.79 million in Fiscal 2026 primarily due to higher profit before tax.
Profit for the year
Due to the foregoing reasons our profit for the year increased by 151.74 % from 86.26 million in Fiscal 2025 to 217.16 million in Fiscal 2026. The increase in profit for the year attributed to the increase of the Net Worth of the Company in Fiscal 2026.
Fiscal 2025 (consolidated) compared to Fiscal 2024 (standalone)*
*The financial information for Fiscal 2025 has been presented on a consolidated basis, whereas the financial information for Fiscal 2024 is standalone. Accordingly, the figures for the two periods are not strictly comparable, and suitable explanations have been provided wherever relevant.
REVENUE
Total Income
Our total income has increased by 28.86 % from 1,844.36 million in Fiscal 2024 to 2,376.61 million in Fiscal 2025 primarily due to an increase in revenue from operations from 1,836.03 million in Fiscal 2024 to 2,373.24 million in Fiscal 2025.
Revenue from operations
Our revenue from operations increased by 29.26 % from 1,836.03 million in Fiscal 2024 to 2,373.24 million in Fiscal 2025 primarily due to an increase in the sale of goods from 1,742.90 million in Fiscal 2024 to 2,294.41 million in Fiscal 2025 due to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Other income
Our other income decreased by 59.66 % from 8.33 million in Fiscal 2024 to 3.36 million in Fiscal 2025, due to completion of tenure of subsidy to be received for Interest and Electricity duty.
EXPENSES
Total Expenses
Our total expenses increased by 27.04% from 1,777.63 million in Fiscal 2024 to 2,258.24 million in Fiscal
2025 primarily due to an increase in (i) in cost of materials consumed, (ii) purchase of traded goods, (iii) changes in our inventories of finished goods and work-in-progress (iv) depreciation and amortization expenses and (v) other expenses.
Cost of Material Consumed
Cost of Material consumed of the company increased by 22.49 % from 1,404.37 million for Fiscal 2024 to
1,720.25 million for Fiscal 2025. The increase was primarily due to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Purchase of traded goods
Purchases of stock-in-trade increased by 1,775.73% from 6.71 million in the Fiscal 2024 to 125.91 million in Fiscal 2025 primarily due to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Changes in inventories of finished goods and work-in-progress
Our changes in inventory of finished goods and work-in-progress was (51.73) million in the Fiscal 2025, while it was (26.90) million in the Fiscal 2024 due to increase in the stock of finished goods and work-in-progress and due to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Employee benefit expense
Our employee benefit expense increased by 25.16 % from 70.87 million in Fiscal 2024 to 88.70 million in Fiscal 2025, due to an increase in salaries, wages and bonus of employees from 69.76 million in Fiscal 2024 to
87.26 million in Fiscal 2025 on account of the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Finance costs
Our finance cost increased by 6.71% from 85.07 million in Fiscal 2024 to 90.78 million in Fiscal 2025, primarily due to an increase in our interest expense on cash credit from 26.04 million in Fiscal 2024 to 33.15 million in Fiscal 2025 and interest on term loans from 34.08 million in Fiscal 2024 to 37.77 million in Fiscal
2025 due to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Depreciation expense
Our depreciation and amortisation expense increased by 15.53% from 55.59 million in Fiscal 2024 to 64.22 million in Fiscal 2025 due to an increase in gross block from 539.74 million to 1540.51 million on account of certain additions mainly in land, factory building, plant and machinery, electric installations and equipments, computers and solar power systems and acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company.
Other expenses
Our other expenses increased by 21.00% from 181.92 million in Fiscal 2024 to 220.12 million in Fiscal 2025 due to increase in (i) manufacturing expenses from 163.80 million in Fiscal 2024 to 192.10 million in Fiscal 2025 and (ii) administration, selling and distribution expenses from 18.12 million in Fiscal 2024 to 28.02 million in Fiscal 2025. The increase in manufacturing expenses was primarily due to a increase in (a) power and fuel expenses from 101.60 million in Fiscal 2024 to 115.43 million in Fiscal 2025 as a result of to the acquisition of our subsidiary and the consequent consolidation of its financial results with those of the Company and (b) Job work expenses from 7.34 million in Fiscal 2024 to 19.98 million in Fiscal 2025. The increase in administration, selling & distribution expenses was primarily due to (a) Freight expense from 7.41 million in Fiscal 2024 to 10.44 million in Fiscal 2025, (b) Repair & maintenance from 1.88 million in Fiscal 2024 to 4.53 million in Fiscal 2025.
Profit before tax
On account of the foregoing our profit before tax increased by 77.38 % from 66.73 million in Fiscal 2024 to
118.36 million in Fiscal 2025.
Tax expense
Our tax expenses increased by 79.11% from 17.92 million in Fiscal 2024 to 32.10 million in Fiscal 2025 primarily due to higher profit before tax.
Profit for the year
Due to the foregoing reasons our profit for the year increased by 76.74 % from 48.81 million in Fiscal 2024 to 86.26 million in Fiscal 2025. The increase in profit for the year attributed to the increase of the Net Worth of the Company in Fiscal 2025.
Liquidity and Capital Resources
Historically, our primary liquidity requirements have been to finance our capital expenditure and working capital needs for our operations. We have met these requirements through cash flows from operations and borrowings. As of March 31, 2026, we had 0.60 million in cash and cash equivalents. We believe that, after taking into account the expected cash to be generated from operations, our borrowings, and the Net Proceeds, we will have sufficient liquidity for our present and anticipated requirements for capital expenditure and working capital for the next 12 months.
Cash Flows
The following table sets forth our cash flows for the years indicated:
( in million)
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| Net cash generated from operating activities | 339.90 | 130.08 | 315.19 |
| Net cash used in investing activities | (323.70) | (945.03) | (80.64) |
| Net cash generated from / (used in) financing activities | (30.87) | 823.46 | (227.83) |
| Cash and Cash Equivalents at the end of the period /year | 0.60 | 15.26 | 6.76 |
Operating Activities
Fiscal 2026
For the Fiscal 2026, our net cash flow used in operating activities was 339.90 million which primarily comprised of (i) profit before tax for the year of 268.95 million which was adjusted primarily for, among other things, depreciation and amortization expense of 125.30 million; Remeasurement of the Defined Benefit Plans of 3.94 million; Finance Cost of 150.98 million, Interest Income of 1.93 million and (ii) working capital changes.
Working capital changes primarily included inter-alia, a decrease in trade receivables of 336.56 million, increase in inventories of 243.82 million and increase in other current assets of 2.25 million, offset by decrease in trade payables of 291.12 million and increase in other financial liabilities of 10.47 million. Net cash flow from operating activities also included income taxes paid of 22.14 million.
Fiscal 2025
For the Fiscal 2025, our net cash flow used in operating activities was 130.08 million which primarily comprised of (i) profit before tax for the year of 118.36 million which was adjusted primarily for, among other things, depreciation and amortization expense of 64.03 million; Remeasurement of the Defined Benefit Plans of 0.03 million; Finance Cost of 90.39 million, Interest Income of 2.34 million and (ii) working capital changes. Working capital changes primarily included inter-alia, an increase in trade receivables of 227.80 million, increase in inventories of 292.37 million and increase in other current assets of 34.93 million, offset by increase in trade payables of 407.6 million and increase in other financial liabilities of 12.56 million. Net cash flow from operating activities also included income taxes paid of 12.18 million.
Fiscal 2024
For the Fiscal 2024, our net cash flow used in operating activities was 315.19 million which primarily comprised of (i) profit before tax for the year of 66.73 million which was adjusted primarily for, among other things, depreciation and amortization expense of 55.59 million; Remeasurement of the Defined Benefit Plans of 0.02 million; Finance Cost of 85.01 million, Interest Income of 0.87 million, Loss on sale of Fixed Asset of 2.31 million and (ii) working capital changes. Working capital changes primarily included inter-alia, a decrease in trade receivables of 254.79 million, increase in inventories of 64.14 million and increase in other current assets of 0.73 million, decrease in trade payables of 62.61 million, decrease in other current liabilities of 1.42 million. Net cash flow from operating activities also included income taxes paid of 11.08 million.
Investing Activities
Fiscal 2026
For the Fiscal 2026, our net cash flow used in investing activities was 323.70 million which was towards payments for property, plant and equipment, intangibles (including capital work in progress and capital advances) of 362.25 million, receipt of government grant of 42.26 million, Bank Deposits Placed with Bank of 5.48 million and payment of security deposit of 0.16 million and offset by interest received on fixed deposits of 1.93 million.
Fiscal 2025
For the Fiscal 2025, our net cash flow used in investing activities was 945.03 million which was towards payments for property, plant and equipment, intangibles (including capital work in progress and capital advances) of 928.88 million, Bank Deposits Placed with Bank of 14.83 million and payment of security deposit of 3.14 million and offset by interest received on fixed deposits of 2.34 million.
Fiscal 2024
For the Fiscal 2024, our net cash flow used in investing activities was 80.64 million which was towards payments for property, plant and equipment, intangibles (including capital work in progress and capital advances) of 75.06 million, and bank deposit of 8.95 million which was partially offset by proceeds from disposal of property, plant and equipment of 2.50 million and interest received on fixed deposits of 0.87 million.
Financing Activities
Fiscal 2026
For the Fiscal 2026, our net cash flow used in financing activities was 30.87 million which primarily comprised of net proceeds from current borrowings of 5.73 million, net proceeds from non-current borrowing 108.87 million, payment of lease liability of 2.14 million, payment of finance cost of 150.98 million.
Fiscal 2025
For the Fiscal 2025, our net cash flow generated from financing activities was 823.46 million which primarily comprised of net proceeds from current borrowings of 165.74 million, net proceeds from non-current borrowing
730.27 million, payment of lease liability of 0.30 million, payment of finance cost of 90.39 million.
Fiscal 2024
For the Fiscal 2024, our net cash flow used in financing activities was 227.83 million which primarily comprised of net repayments of current borrowings of 106.47 million, net repayments of non-current borrowings of 36.35 million and payment of finance cost of 85.01 million.
Indebtedness
As on March 31, 2026, we had non-current borrowings of 1064.69 million and current borrowings of 711.26 million. For further information of our Indebtedness, see Financial Indebtedness on page 393 and Risk Factor
8 Our Company has negative cash flows from its investing activity and financing activity, details of which are given below. Sustained negative cash flow could adversely impact our business, financial condition and results of operations on page no. 33.
Capital work in progress
The following table sets forth certain information relating to our capital works in progress:
( in million)
| Consolidated | Consolidated | Standalone | |
| Capital work-in-progress | 156.76 | 12.65 | - |
Contingent Liabilities and Capital Commitments
As of March 31, 2026, we recorded the following contingent liabilities in our Restated Consolidated and Standalone Financial Information:
| ( in million) | |||
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Consolidated | Consolidated | Standalone | |
| Contingent Liabilities | |||
| Corporate Guarantees issued by the Company | 557.50 | 557.50 | 467.50 |
| in favour of its Subsidiary, Alpine Cottweave | |||
| LLP | |||
| Outstanding Export Obligation under EPCG | 108.29 | - | - |
| Scheme of 506.16 million against custom | |||
| duty saved 108.29 million | |||
| Income Tax Outstanding Demand | 3.60 | 3.31 | 2.80 |
| TDS Outstanding Demand | 0.20 | 0.20 | 0.05 |
| GST Outstanding Demand | 15.01 | 15.01 | - |
| Total | 684.59 | 576.02 | 470.35 |
| Capital Commitments | |||
| Estimated amount of contracts to be | 1,400.40 | - | - |
| executed on capital account | |||
| Less: Capital Advances during the year | 49.46 | - | - |
| Less: Executed and Transferred to Capital | 156.76 | - | - |
| W.I.P. during the year | |||
| Estimated amount of contracts remaining | 1,194.18 | - | - |
| to be executed on capital account and not | |||
| provided for (net of advances) |
Debt/Equity Ratio
Our debt/equity ratio (i.e., Total debt divided by Total equity) was 2.35 times, 3.14 times and 1.80 times as on March 31, 2026, March 31, 2025, and March 31, 2024, respectively.
Total debt represents the sum of non-current borrowings and current borrowings.
Credit Ratings
Our current credit ratings have been assigned by CARE Ratings Limited who have assigned CARE BBB-/Stable, on long term scale, to our fund-based facilities, and CARE A3 on short term scale, to our non-fund based facilities. For details, see Risk Factor 5- Our Companys long-term rating was downgraded by CRISIL Ratings Limited from CRISIL BBB-/Stable to CRISIL BB/Stable and its short-term rating from CRISIL A3 to CRISIL A4+ with a remark Issuer Not Cooperating. Any adverse perception arising from such credit rating or any future downgrade of our credit ratings by a domestic or international credit rating agency may adversely affect the perception of our credit profile, increase our cost of borrowings, adversely affect our ability to borrow on a competitive basis and have a material adverse effect on our business, financial condition, cash flows and results of operations. on page 31.
Related Party Transactions
We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see Financial Statements - Restated Financial Information Note 37 (B) - Related Party Transactions on page 336.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to various types of market risks during the normal course of business such as credit risk, liquidity risks including interest rate risks.
Market Risk
Market risk arises from the Groups use of interest-bearing financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk) or other market factors. Financial instruments affected by market risk include borrowings, loan givens, fixed deposits etc.
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 Group is exposed to credit risk from its operating activities (primarily trade receivables).
Trade Receivable :
Maximum exposure to the credit risk is on account of outstanding balances in the trade receivables account, but as per experience the ageing of debtors is always kept less than six months and there are no bad debts encountered in past. As the receivables of the company are below the criterial of ECL policy to recognize expected credit loss, Group has not made any Expected credit loss provision (ECL).
Foreign Currency Risk
The Group is exposed to foreign currency risk arising from transactions denominated in currencies other than its functional currency. These risks arise due to fluctuations in exchange rates, which can affect the Groups profitability and financial position.
Foreign currency risk is managed through hedging and the use of derivative financial instruments, such as forward exchange contracts. The objective of the Groups foreign exchange risk management policy is to minimize potential adverse effects of exchange rate movements on its financial results.
The Group monitors foreign currency exposures on a regular basis and evaluates the need for hedging based on anticipated transactions and market conditions. Foreign exchange gains or losses arising from the settlement of such transactions and from the translation of monetary assets and liabilities at exchange rates prevailing at the reporting date are recognised in the statement of profit and loss.
The management regularly assesses the impact of movements in exchange rates on its foreign currency exposures and takes appropriate risk mitigation measures when deemed necessary.
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 Groups exposure to the risk of changes in market interest rates relates primarily to the Groups debt obligations with floating interest rates. The Group manages its interest rates by selection appropriate type of borrowings and by negotiation with the bankers.
The exposure of the borrowings (long term and short term) to interest rate changes at the end of the reporting period are as follows:
( in million)
| March 31, 2026 | March 31, 2025 | March 31, 2024 | |
| Consolidated | Consolidated | Standalone | |
| Variable Rate Borrowing | 1,456.90 | 1,362.63 | 636.50 |
| Fixed Rate Borrowings | 319.06 | 298.27 | 128.16 |
| Total Borrowings | 1,775.95 | 1,660.90 | 764.66 |
Interest rate sensitivity
| Particular | Impact on profit before tax /pre-tax equity | ||
| As at March 31, 2026 | As at March 31, 2025 | As at March 31, 2024 | |
| Consolidated | Consolidated | Standalone | |
| Increase by 50 Basis Points | (7.28) | (6.81) | (3.18) |
| Decrease by 50 Basis Points | 7.28 | 6.81 | 3.18 |
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short-term line of credits from banks to ensure necessary liquidity. The Group closely monitors its liquidity position and deploys a robust cash management system. During the year, the Group has been regular in repayment of principal and interest on borrowings on or before due dates. The Group requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects.
The table below summarises the maturity profile of the Companys financial liabilities based on contractual undiscounted payments:
| As on March 31, 2026 | Less than 1 year | 1-5 Years | Over 5 years | Total | Carrying value |
| Borrowings * | 710.15 | 947.07 | 120.38 | 1,777.61 | 1,775.95 |
| Lease Liabilities | 0.95 | 2.54 | 11.13 | 14.63 | 14.63 |
| Trade Payables | 385.53 | 0.04 | - | 385.58 | 385.58 |
| Other Financial Liabilities | 23.85 | - | - | 23.85 | 23.85 |
| Total | 1,120.48 | 949.66 | 131.52 | 2,201.66 | 2,200.01 |
| As on March 31, 2025 | Less than 1 year | 1-5 Years | Over 5 years | Total | Carrying value |
| Borrowings * | 668.08 | 876.70 | 117.48 | 1,662.26 | 1,660.90 |
| Lease Liabilities | 0.37 | 1.96 | 1.69 | 4.02 | 4.02 |
| Trade Payables | 676.69 | - | - | 676.69 | 676.69 |
| Other Financial Liabilities | 13.38 | - | - | 13.38 | 13.38 |
| Total | 1,358.52 | 878.67 | 119.17 | 2,356.35 | 2,354.99 |
*Note: The amount of unamortized processing charges have not been deducted from the Non-current borrowings.
| As on March 31, 2024 | Less than 1 year | 1-5 Years | Over 5 years | Total | Carrying value |
| Borrowings * | 490.80 | 274.13 | - | 764.93 | 764.66 |
| Lease Liabilities | - | - | - | - | - |
| Trade Payables | 269.09 | - | - | 269.09 | 269.09 |
| Other Financial Liabilities | 0.81 | - | - | 0.81 | 0.81 |
| Total | 760.70 | 274.13 | - | 1,034.83 | 1,034.56 |
*Note: The amount of unamortized processing charges have not been deducted from the Non-current borrowings.
Unusual or Infrequent Events or Transactions
Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
Significant economic changes that materially affect or are likely to affect income from continuing Operations.
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect our income from continuing operations identified above in Managements
Discussion and Analysis of Financial Condition and Results of Operations - Principal Factors Affecting our Results of Operations and Financial Condition and the uncertainties described in Risk Factors on pages 361 and 27, respectively.
Known trends or uncertainties.
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in Managements Discussion and Analysis of Financial Condition and Results of Operations - Principal Factors Affecting our Results of Operations and Financial Condition and the uncertainties described in Risk Factors on pages 361 and 27, respectively. To our knowledge, except as discussed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
Total turnover of each major industry segment
We operate only in one industry segment, i.e. Textile. For details of our turnover Managements Discussion and
Analysis of Financial Condition and Results of Operations - Our Results of Operations above, on page 378.
Future relationship between cost and revenue
Other than as described in Risk Factors , Our Business and Managements Discussion and Analysis of
Financial Condition and Results of Operations on pages 27, 219 and 359, respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
New products or business segments
Other than as disclosed in this section and in Our Business on page 219, there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.
Seasonality or cyclicality of business
Our Business, being engaged in weaving and spinning, primarily caters to process houses, garment manufacturers, and other downstream players in the textile value chain. Unlike the finished fabric and garment segment, which is influenced by seasonal variations in fashion cycles, festive demand, and climatic conditions, our business does not experience material seasonality.
Since our products serve as raw materials for further processing, the demand for Yarn and Grey Fabrics remains relatively stable throughout the year. However, our operations are sensitive to the availability and pricing of raw materials, particularly cotton and cotton Yarn, which constitute a major portion of our input cost. Any significant volatility in cotton prices due to changes in crop cycles, climatic conditions, government policies, or international demand supply dynamics can impact our cost of production and, in turn, our profitability. While such fluctuations may affect margins, they do not materially alter the seasonality or stability of our revenues.
Competitive conditions
We operate in a competitive environment. Please refer to Our Business , Industry Overview and Risk Factors on pages 219, 156 and 27, respectively for further information on our industry and competition.
Changes in accounting policies
There were no changes in the accounting policies during the Fiscals 2026, 2025 and 2024.
Summary of reservations or qualifications or adverse remarks or emphasis of matters of auditors
There are no reservations, qualifications or adverse remarks or matters of emphasis in the audit reports on the Restated Consolidated and Standalone Financial Information.
Significant dependence on single or few suppliers or customers
We depend on a few key suppliers to procure our raw materials. Further see, Risk Factor 17- We are primarily dependent upon top 10 suppliers for procurement of raw materials and purchase of traded goods for the Fiscal
2026, Fiscal 2025 and Fiscal 2024 which amounted to 1,754.23 million, 1,589.44 million and 1,178.15 million and accounted for 64.26%, 82.76% and 81.43% of our total purchases of raw material and traded goods for the respective years, with whom we do not have any firm commitments. Any disruption in the supply of these goods or fluctuations in their prices, inter alia, due to seasonality of cultivation of cotton could have a material adverse effect on our business operations and financial conditions. on page 39. In the Fiscals 2026, 2025 and 2024 our purchases of raw materials and traded goods from our top ten (10) suppliers for the respective Fiscals contributed to 64.26%, 82.76 % and 81.43%, of our Purchases. The substantial portion of our revenues has been dependent upon few customers. For further details Risk Factor- 1 - Substantial portion of our revenues has been dependent upon our top 10 customers for the Fiscal 2026, Fiscal 2025 and Fiscal 2024 which amounted to 2,410.22 million, 1,665.85 million and 1319.29 million which accounted for 70.33%, 70.19 % and 71.86 % of our revenue from operations for the respective years, with whom we do not have any firm commitments. The loss of any one or more of our top 10 customers would have a material adverse effect on our Business, cash flows, results of operations and financial condition on page 27. For instance, our top ten customers for the Fiscals 2026, 2025 and 2024 accounted for 70.33%, 70.19% and 71.86% of our revenue from operations for the respective year.
Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.
Changes in revenue during the last three Fiscals are as described above in the Comparison Management
Discussion and Analysis of Financial Condition and Results of Operations - Fiscal 2026 compared to Fiscal 2025 , and Managements Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2025 compared to Fiscal 2024 above on pages 383 and 383, respectively.
Material developments subsequent to March 31, 2026*
Except as disclosed in this Red Herring Prospectus, there are no circumstances that have arisen since March 31, 2026, the date of the last financial statements included in this Red Herring Prospectus, which materially and adversely affect or is likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.
*As certified by our Statutory Auditors, M/s Suresh Chandra & Associates, Chartered Accountants through certificate dated July 8, 2026 having UDIN: 26128896MGHLRS4933.
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