Alpine Texworld Ltd Management Discussions

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, “Business - Manufacturing/Production Process”.

In January 2024, our Company has installed a rooftop solar plant at Manufacturing Unit 1 with a capacity of 820 KW of solar energy ("Solar Unit 1"). In addition to the rooftop solar panels, in March 2025, the 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 Unit2") with a capacity of 5.4 megawatts of solar energy, which has further reduced dependency on grid power and promoted cost efficiency. The generated electricity offsets the Companys power consumption, with Uttar Gujarat Vij Company Limited adjusting the same against energy bills.

Our key performance indicators for the Fiscals 2025, 2024 and 2023 as per Restated Consolidated and Standalone Financial Information is as follows:

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.

Equity + Closing Total Equity) / 2).

Operational Key Performance Indicators (KPIs) of our Company

3) Average capacity utilization Is calculated from dividing the actual production by installed capacity for respective period.

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 ? 1,720.25 million, ? 1,404.37 million and ? 1,686.71 million, in Fiscal 2025, Fiscal 2024 and Fiscal 2023 which represented 76.18%, 79.00%, and 71.96%, 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 Draft 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 2025, our capital expenditure (i.e., payments for acquisition of property, plant and equipment and capital work-in-progress) was ? 638.48 million while our gross block (i.e., cost of property, plant and equipment and capital work-in-progress) as at March 31, 2025 was ^1,553.16 million. Around 41.11% of our gross block as at March 31, 2025, was a result of our capital expenditure

made in the Fiscal 2025. The capital expenditure for work in progress in the Fiscal 2025 was ? 259.12 million, out of which ? 246.48 million which was fully capitalised during the same year. Our Manufacturing Unit 1 was established in Fiscal 2018 and currently having annual installed capacity of 1,80,00,000 metres with 112 highspeed Toyota shuttleless Air jet looms and further Manufacturing Unit 2 was established in Fiscal 2025 having an annual installed capacity of spinning 6000 metric tonnes of cotton yarn ("Yarn").

Following table states the capital expenditure made by the company in reporting period in comparison with the amount of gross block in that particular period/year.

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 209 and 210.

We use a combination of internal accruals and debt financing for our expansion plans. We intend to use ? 320.83 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 overruns, 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 a 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 Factors - 2 - We are primarily dependent upon top 10 suppliers for procurement of raw materials and purchase of traded goods for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 accounted for 82.76%, 81.43% and 70.85% 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 raw materials or fluctuations in their prices could have a material adverse effect on our business operations andfinancial 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.

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

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, 2025 and restated standalone statement of assets and liabilities as at March 31, 2024 and March 31, 2023, 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, 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 and March 31, 2023, 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 September 15, 2025 for the purpose of inclusion in the Draft Red Herring Prospectus (“DRHP”) 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”).

i) 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 31 March 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.

ii) The Special Purpose Ind AS financial statements as at and for the year ended March 31, 2023 prepared in accordance with Ind AS prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India which have been approved by the Board of Directors at their meeting held on 15^th September, 2025.

The Special Purpose Ind AS financial statements as at and for the year ended March 31, 2023, have been prepared solely for the purpose of preparation of the Restated Consolidated and Standalone Financial Information for inclusion in offer documents in relation to the proposed IPO, which requires financial statements of all the period included, to be presented under Ind AS. As such, these Special Purpose Ind AS Financial Statements are not suitable for any other purpose, other than for the purpose of preparation of the Restated Consolidated and Standalone Financial Information and are also not financial statements prepared pursuant to any requirements under section 129 of the Act. For the purpose, the Company has followed the same accounting policy and accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101) as initially adopted on transition date i.e. 1^st April 2023 for reporting. Accordingly, suitable restatement adjustments (both re-measurements and reclassifications) in the accounting heads are made to the Special Purpose Ind AS Consolidated financial statements as at and for the year ended March 31, 2023. The basis of preparation for specific items where exemptions has applied are as follows:

Property Plant & Equipment and Intangible assets - As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP as deemed cost on 1^st April 2022 for all the items of property, plant & equipment. For the purpose of Special Purpose Ind AS financial statements as at and for the year ended March 31, 2023, the company has provided the depreciation based on the estimated useful life of respective years and as the change in estimated useful life is considered as change in estimate, accordingly there is no impact of this roll back. Similar approach has been followed with respect to intangible assets and investment property.

There is no difference of equity balance computed under Special Purpose Ind AS financial statements as at and for the year ended March 31, 2023 (i.e. equity under Indian GAAP adjusted for impact of Ind AS 101 items and after considering profit or loss for the year ended March 31, 2023, with adjusted impact due to Ind-AS principles applied on proforma basis) and equity balance computed in opening Ind AS balance sheet as at transition date (i.e. April 01, 2023), prepared for filing under Companies Act, 2013 of the first set of consolidated financial statement for the year ended 31st March 2024 prepared in accordance with the requirements of IND AS 101 - First time adoption of Indian Accounting Standards.

Accordingly, the closing equity balance as of 31 March 2022 of the Special Purpose CFS has been carried forward to opening Consolidated Ind AS Balance sheet as at transition date already adopted for reporting under Companies Act, 2013.

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 2.6 of Note -2 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. the 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-I : 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 Companies 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:

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 realizable value, whichever is lower except for Waste / Scrap which are valued at net realizable 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, capitalized 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 recognized 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 recognized 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 resonable 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. 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

(iv) 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 on a straight-line basis over the period. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expense. 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.

(xii) 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.

(xiii) 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 shortterm 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.

(xiv) 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 349ecognizes 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 recognised 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 recognised in Statement of Profit and Loss when the liabilities are derecognised as well as through the effective interest rate (EIR) amortisation 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 amortisation is included as finance costs in the Statement of Profit and Loss.

Trade and other payables are recognised 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 recognised in the Statement of Profit and Loss.

(b) Derecognition of Financial Liability

The Company 351ecognized351s 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 351ecognized 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 recognised 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.

(xv) 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.

(xvi) 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

(xvii) 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.

(xviii) 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.

(xix) 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.

(xx) 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.

(xxi) 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.

(xxii) 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 Draft 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.

Reconciliation of Restated profit/loss for the period/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.

Reconciliation of profit/loss for the period/year to PAT Margin

The table below reconciles Profit for the period/year to PAT Margin. PAT Margin is calculated as Profit After Tax as a percentage of Revenue from Operations

Reconciliation of Return on Capital Employed

Capital work in progress

The following table sets forth certain information relating to our capital works in progress:

Contingent Liabilities and Capital Commitments

As of March 31, 2025, we recorded the following contingent liabilities in our Restated Financial Statements:

Debt/Equity Ratio

Our debt/equity ratio (i.e., Total debt divided by Total equity) was 3.14 times, 1.80 times, and 2.41 times as on March 31, 2025, March 31, 2024 and March 31, 2023, respectively.

‘Total debf represents the sum of non-current borrowings and current borrowings.

Credit Ratings

Our current credit ratings have been assigned by CRISIL Ratings Limited who have assigned CRISIL BBB- /Stable, on long term scale, to our fund-based facilities, and CRISIL A3 on short term scale, to our non-fund based facilities. For details, see ‘Risk Factors -53 - Any downgrading of our credit rating by a domestic or international credit rating agency may increase interest rates for our future borrowings, which would increase our cost of borrowings, and adversely affect our ability to borrow on a competitive basis. on page 62.

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 312.

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

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).

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:

Interest rate sensitivity

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:

Unusual or Infrequent Events or Transactions

Except as described in this Draft 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.

Known trends or uncertainties.

Total turnover of each major industry segment

Future relationship between cost and revenue

New products or business segments

Other than as disclosed in this section and in ‘ Our Business on page 200, 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 200, 148 and 37, respectively for further information on our industry and competition.

Changes in accounting policies

There were no changes in the accounting policies during Fiscals 2025, 2024 and 2023.

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 Factors - 2 - We are primarily dependent upon top 10 suppliers for procurement of raw materials and purchase of traded goods for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 accounted for 82.76%, 81.43% and 70.85% 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 raw materials or fluctuations in their prices could have a material adverse effect on our business operations and financial conditions. on pages 39. In Fiscals 2025, 2024 and 2023 our purchases of raw materials and traded goods from our top ten (10) suppliers for the respective Fiscals contributed to 82.76 %, 81.43%, and 70.85% of our Purchases. The substantial portion of our revenues has been dependent upon few customers. For further details ‘Risk Factors- 1 - Substantial portion of our revenues has been dependent upon our top 10 customers for the Fiscal year 2025, Fiscal 2024 and Fiscal 2023 accounted for 70.19 %, 71.86 % and 82.88% of our revenue from operations for the respective, with which we do not have any firm commitments. The loss of any one or more of our major customers would have a material adverse effect on our business, cash flows, results of operations and financial condition on page 37. For instance, our top ten customers for the Fiscals 2025, 2024 and 2023 accounted for 70.19%, 71.86% and 82.88% 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.

Material developments subsequent to March 31, 2025*

Except as disclosed in this Draft Red Herring Prospectus, there are no circumstances that have arisen since March 31, 2025, the date of the last financial statements included in this Draft 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.

CAPITALIZATION STATEMENT

The following table sets forth our Companys capitalisation as at March 31, 2025, on the basis of the Restated Consolidated and Standalone Financial Information, and as adjusted for the Issue. This table should be read in conjunction with the sections titled “Managements Discussion and Analysis of Financial Condition and Results of Operations”, “Restated Consolidated and Standalone Financial Information” and “Risk Factors” on

FINANCIAL INDEBTEDNESS

Our Company and Subsidiary has availed certain loans and financing facilities in the ordinary course of business for purposes, inter alia, meeting its working capital, capital expenditure and other business requirements.

Our Company has obtained the necessary consents required under the relevant financing documentation for undertaking activities in relation to the Issue, including dilution of the current shareholding of the Promoters and members of the promoter group, expansion of business of the Company, effecting changes in the Companys management, ownership capital structure, shareholding pattern, constitutional documents, and Boards composition.

For details regarding the borrowing powers of our Board, in accordance with Section 179 and Section 180 of the Companies Act 2013, and our Articles of Association, see “Our Management -Borrowing Powers” on page 242.

As on July 31, 2025, the outstanding borrowings of our Company aggregated to f 1,724.25 million, on a consolidated basis. Set forth below is a brief summary:

For further details of our outstanding borrowings as on March 31, 2025, March 31, 2024 and March 31, 2023, see “Restated Consolidated and Standalone Financial Information” on Page 267.

Principal terms of the borrowings availed by our Company and Subsidiary are disclosed below:

The details provided below are indicative and there may be additional terms, conditions and requirements under the various borrowing arrangements entered by the Company:

1. Interest: In respect of the term loan and working capital facilities availed by our Company and our Subsidiary, the current prevailing interest rate ranges from 7.95% per annum to 12.00% per annum. The interest rate for the loans sanctioned are typically tied to a base rate/marginal cost of lending rate, which may vary from lender to lender.

2. Penal Interest: The terms of certain financing facilities availed by our Company prescribes penalties for non-compliance of certain obligations by our Company. These include, inter alia, delay in payment of or non-payment of instalments or interest, EMIs and all other monies on their due date. Further, the default interest payable on the facilities availed by us 1.0 % per annum.

3. Tenor: The tenor of the working capital facilities is typically up to 12 months subject to renewal, the term loan and vehicle loan facilities availed by us typically has a tenor of 60 months to 90 months.

4. Security: The borrowings availed by our Company and our Subsidiary are secured by, inter alia, the following :

Company*:

(a) first pari passu charge on entire current assets, both present and future;

(b) first pari passu charge over all moveable and immovable fixed assets, both present and future;

(c) Personal guarantees of: (i) Sumit Champalal Agarwal, (ii) Sandeep Santkumar Agrawal, (iii)

Sachinkumar Santkumar Agrawal and (iv) Champalal Gopiram Agarwal.

(d) Corporate guarantee of Alpine Weaving Private Limited.

(e) Charge over Book debts, Stocks, Book Debts, and movable Plant and Machinery.

(f) Maintain fixed deposit receipt, with cash margin ranging from 15% per annum to 25% per annum, in auto-renewal mode, to be held till the end of the loan tenure.

Subsidiary:

(a) first pari passu charge on entire current assets and immovable properties;

(b) first and second pari passu charge over all moveable fixed assets, both present and;

(c) Charge by way of mortgage over immovable fixed assets;

(d) Personal guarantees of: (i) Sumit Champalal Agarwal, (ii) Sandeep Santkumar Agrawal (iii) Champalal Gopiram Agarwal and (iv) Sachinkumar Santkumar Agrawal.

(e) Corporate guarantee of Alpine Weaving Private Limited and Alpine Texworld Limited.

There may be additional requirements for creation of security under the various borrowing arrangements entered into by us.

5. Re-payment: The working capital facilities availed by our Company and our Subsidiary are repayable within a period of 12 months or on demand. Term loan facilities availed by our Company are repayable on the due date and on the terms and conditions as may be agreed between us and the respective lenders.

6. Pre-Repayment: Certain term loan facilities and Credit facilities cannot be prematurely repaid by the Company in full or part before the due date, except prior approval of the lender subject to payment of such pre-payment charges ranging from 2% per annum to 4% per annum and conditions as may be prescribed.

7. Penalty: The term loan facilities availed by our Company contain provisions prescribing penalties on default and non-compliance, over and above the prescribed interest rate, which range up to 2.00 % per annum of the amounts involved. These instances include, inter alia, delayed payments, non-submission of stock statements, Non-compliance of terms of sanctions related to security creation.

8. Restrictive Covenants: The facilities sanctioned to our Company contain restrictive covenants, which require prior written consent of the lender or prior intimation to be made to the lender, some of which are set out below:

(i) Change the general nature of the business or undertake any expansion or invest in any other entity;

(ii) Enter into any merger or amalgamation or reconstruction or do a buy-back or implement any scheme of expansion/diversification/modernization other than incurring routine capital expenditure;

(iii) Not to permit any change in its ownership or control or management;

(iv) Dilute the capital holding of the promoters in the Company;

(v) Change the general nature of the business or undertake any expansion or invest in any other entity;

(vi) allow promoters or associates to transfer shares;

(vii) issue any debentures, raise any loans, accept deposits from public, issue equity or preference capital, change its capital structure or create any charge on its assets or give any guarantees;

The details provided above are indicative and there may be additional terms, conditions and requirements under the specific borrowing arrangements entered by our Company.

9. Events of default: Borrowing arrangements entered into by our Company contain standard events of default, some of which are set out below:

(a) Default in the performance of any covenant, condition, or agreement on the part of the Company in accordance with transaction documents;

(b) Failure to repay on demand any moneys which ought to be paid by the Company under the consortium agreements including principal interest and other moneys;

(c) Failure to furnish and verify all such statements, reports, certificate, vouchers, list of all stocks and particulars of book debt and information as may be from time to time required by the bank;

(d) Failure to insure the hypothecated goods and ensure that they are kept in good, saleable and marketable condition;

(e) Diversion of funds/ amount of loan/advance or attempt to divert the same, so disbursed/paid.

(f) If any step is taken by any person, or the Company towards passing a resolution to wind up the Company, or if a resolution to wind up the company is passed, or if a notice of a meeting to pass such a resolution is issued by the Company;

(g) If any land, building, structure or plant and machinery of the Company are sold, disposed of, charged, encumbered or alienated, or attempted or purported to be sold, disposed of, charged, encumbered or alienated or the said buildings, structure, machinery, plant or other equipment are removed, pulled down or demolished;

(h) If a receiver is appointed of the Company or if any person, firm or company shall take step towards applying for or obtaining an order for the appointment of a receiver to any property or assets whatsoever of the Company;

(i) If it appears to the bank that false or misleading information in any material particulars was given in the Companys proposals made to the bank and such default is not remedied forthwith and on the failure of the Company to remedy the same; and

(j) Changes in constitution, such as its promoter directors, core management or any merger/acquisition/ amalgamation without prior consent of the lender.

(k) Undertaking new projects without prior permission.

(l) If extra-ordinary circumstances have occurred which make it improbable for the Project to be carried out for the Company to fulfill its obligations or if any other event or circumstances shall occur which shall be prejudicial to or endanger or be likely to prejudice or endanger a security.

The details above are indicative and there may be additional terms that may amount to an event of default under the various borrowing arrangements entered into by the Company.

10. Consequences of occurrence of events of defaults: In terms of the Companys borrowing arrangements, as a consequence of events of defaults, our lenders may, inter alia:

(a) Declare any or all amounts under the facility, either whole or in part, as immediately due and payable at once to the lender;

(b) Enter upon and take possession of the mortgaged/hypothecated assets of the Borrower

(c) To exercise any other rights that maybe available to the lender under the financing arrangements and applicable law;

(d) Entitle to enter upon the premises and take charge and/or possession of, seize, recover, receive and remove them and/or sell by public auction or by private contract, dispatch or consign for realization or otherwise dispose of or deal with all or any part of the hypothecated assets, and

to enforce, realise, settle, compromise, and deal with any rights and claims relating thereto, without being bound to exercise any of these powers or be liable for any losses in the exercise or non-exercise thereof;

(e) Withhold or cancel or revoke the credit facility at once, if it is found hereafter that any information documents/particulars furnished are incorrect.

(f) Entitle to discontinue the facility in case of material changes in the circumstances/conditions which in the opinion of the bank will be or likely to be prejudicial to the interest of the bank;

(g) Appointment and removal of whole-time Director(s) on the Board of Directors of the Borrower.

The details above are indicative and there may be additional consequences that may amount to occurrence of an event of default under the various borrowing arrangements entered into by the Company.

We have obtained the necessary consents required under the relevant loan documentation for undertaking activities in relation to the Issue. For further details in relation to our borrowings, see “Risk Factors - 8 - We are dependent on credit facilities from banks to fund our business operations. Any event where we are unable to obtain, renew or enhance credit limits from the banks, repay the term loan, or the loans are recalled on a short notice, we may be required to arrange for funds to fulfil the necessary requirements. The occurrence of these events may have an adverse effect on our cash flow and financial conditions of the company. We have incurred indebtedness which exposes us to various risks which may have an adverse effect on our business and results of operations” on page 44.