Kusumgar Ltd Management Discussions

(4) Capacity utilisation has been calculated on the basis of actual production in the relevant Fiscal divided by the installed capacity as at the end of such Fiscal.

For details regarding our installed capacity, actual production and capacity utilisation for Fiscals 2025, 2024 and

2023, see "Our Business - Manufacturing Capabilities" on page 192.

Capital investments and associated operating costs are related to the commissioning of new processing and weaving units.

The table below sets forth our total number of employees as at the dates indicated and our employee benefits expense for the fiscal years indicated and as a percentage of revenue from operations.

Although our Company?s reporting currency is in Indian Rupees, we transact a portion of our business in several other currencies. Certain portions of our income and expenses are generated or incurred in other currencies and certain portions of our assets (trade receivables and cash and cash equivalents) and liabilities (trade payables) are in other currencies, such as USD and Euros.

The table below sets forth our total foreign currency receivables, total trade payables, total foreign currency borrowings, the total value of our outstanding forward contracts against net receivables and borrowings, and net gain/(loss) on foreign currency transactions and translation as at and for the fiscal years indicated.

The exchange rates between the Indian Rupee and the currencies in which we receive payments for such exports, primarily the USD, have fluctuated in the past and our results of operations have been affected by such fluctuations in the past and may be impacted by such fluctuations in the future. Due to our inherent net foreign currency long position, depreciation of the Indian Rupee against foreign currencies will generally have a positive effect on our revenues and our results of operations and appreciation of the Indian Rupee against foreign currencies will generally have a negative effect on our revenues and our results of operations. There can be no guarantee that such fluctuations will not adversely affect our results of operations. However, the positive effect on depreciation of the Indian Rupee may not be sustained or may not show an appreciable effect on our results of operations in any given financial period due to other variables affecting our results of operations during the same period. Moreover, we expect that our cost of imported goods, such as raw materials, imported stores and spares, and other expenses incurred by us may rise during a sustained depreciation of the Indian Rupee against the USD.

Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities (when revenue or expense is denominated in a different currency from our functional currency). We from time to time hedge a significant portion of our net foreign exchange exposure through forward contracts and foreign currency borrowings. We are exposed to foreign currency risk on the unhedged exposure of foreign currency translation of receivables and trade payables. For additional quantitative disclosures on foreign currency risk, see "Restated Financial Information - Note 48 - Financial Risk Management Objectives and Policies - (a) Market Risk - (ii) Foreign Currency Risk? on page 306.

In evaluating our business, we consider and use certain non-GAAP financial measures and key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures and key performance indicators are not intended to be considered in isolation or as a substitute for the Restated Financial Information. We present these non-GAAP financial measures and key performance indicators because they are used by our management to evaluate our operating performance. These non-GAAP financial measures are not defined under the Ind AS and are not presented in accordance with the Ind AS. The non-GAAP financial measures and key performance indicators have limitations as analytical tools. Further, these non-GAAP financial measures and key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to the Ind AS measures of financial performance or as an indicator of our financial condition, results of operations or cash flows.

For details of certain Ind AS financial measures, non-GAAP financial measures and statistical measures, see "Our Business - Overview" and "Basis for Offer Price - Key Performance Indicators ("KPIs")" on page 179 and 116, respectively.

The following table sets forth our EBITDA and EBITDA Margin, which are non-GAAP financial measures, for the fiscal years indicated.

The following table sets forth our PAT Margin, which is a non-GAAP financial measure, for the fiscal years indicated.

The following table sets forth our Net Debt and Net Debt to EBITDA Ratio, which is a non-GAAP financial measure, as at the dates indicated.

The following table sets forth our Return on Equity, which is a non-GAAP financial measure, for the fiscal years indicated.

The following table sets forth our Return on Capital Employed, which is a non-GAAP financial measure, for the fiscal years indicated.

The following table sets forth our Fixed Assets Turnover Ratio, which is a non-GAAP financial measure, for the fiscal years indicated.

The following table sets forth our Net Working Capital Days, which is a non-GAAP financial measure, for the fiscal years indicated.

The Restated Financial Information of the Group comprises the Restated Statement of Assets and Liabilities as at March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Statement of Profit and Loss (including other comprehensive income), the Restated Statement of Cash Flows, the Restated Statement of Changes in Equity for the years ended March 31, 2025, March 31, 2024 and March 31, 2023, the summary of material accounting policies and other explanatory information (collectively, the "Restated Financial Information").

The Restated Financial Information has been prepared by the management of the Company for the purpose of inclusion in this Draft Red Herring Prospectus to be filed with the SEBI, the NSE and the BSE in connection with the Offer, prepared in accordance with the requirements of:

(a) Section 26 of Part I of Chapter III of the Companies Act;

(b) the SEBI ICDR Regulations;

(c) the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended; and

(d) the electronic mail dated October 28, 2021 from the SEBI to the Association of Investment Bankers of India, instructing lead managers to ensure that companies provide consolidated financial statements prepared in accordance with the Ind AS for all the three years.

The Restated Financial Information has been compiled by the management from:

(a) the audited consolidated financial statements of the Group as at and for the year ended March 31, 2025 prepared in accordance with the Ind AS as prescribed under section 133 of the Companies Act read with the Ind AS Rules (as amended) and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on June 10, 2025;

(b) the audited special purpose combined financial statements of the Group as at and for the year ended March 31, 2024 prepared based on the following:

i. the audited standalone statutory financial statements of the Company as at and for the year ended March 31, 2024, prepared in accordance with the Ind AS as prescribed under section 133 of the Companies Act read with the Ind AS Rules (as amended) and other recognised accounting practices and policies generally accepted in India; and

ii. pursuant to the Ind AS Rules (as amended from time to time), the Company?s subsidiary ECFPL adopted April 1, 2023 as its reporting date for the first-time adoption of the Ind AS as notified under these rules, and consequently April 1, 2023 as the transition date for preparation of its statutory financial statements for the year ended March 31, 2025. Hence, the general purpose financial statements of ECFPL as at and for the year ended March 31, 2025 were the first financials statements prepared in accordance with the Ind AS. Up to and for the financial year ended March 31, 2024, ECFPL had prepared its general purpose financial statements in accordance with accounting standards notified under section 133 of the Companies Act, read together with the Companies (Accounting Standards) Rules, 2021 (the "Indian GAAP" or "Previous GAAP") due to which these special purpose financial statements are prepared. In addition, these special purpose financial statements are not the statutory financial statements of ECFPL under the Companies Act. These special purpose financial statements of ECFPL as at and for the year ended March 31, 2024 have been prepared after making suitable adjustments to the accounting heads from their Indian GAAP values following accounting policies and accounting policy choices (both mandatory exceptions and optional exemptions availed as per the Ind AS 101) consistent with that used at the date of transition to the Ind AS (being April 1, 2023) and as per the presentation, accounting policies and grouping/classifications including revised Schedule III to the Companies Act disclosures followed as at and for the year ended March 31, 2025, and which have been approved by the Board of Directors at their meeting held on September 3, 2025; and

(c) the audited special purpose combined financial statements of the Group as at and for the year ended March 31, 2023 prepared based on the following:

i. the audited standalone special purpose financial statements of the Company as at and for the year ended 31 March, 2023, prepared in accordance with the Ind AS as prescribed under section 133 of the Companies Act read with the Ind AS Rules (as amended) and other recognised accounting practices and policies generally accepted in India; and

ii. pursuant to the Ind AS Rules (as amended from time to time), ECFPL adopted April 1, 2023 as its reporting date for the first-time adoption of the Ind AS as notified under these rules, and consequently April 1, 2023 as the transition date for preparation of its statutory financial statements for the year ended March 31, 2025. Hence, the general purpose financial statements of ECFPL as at and for the year ended March 31, 2025 were the first financials statements prepared in accordance with the Ind AS. Up to and for the financial year ended March 31, 2024, ECFPL had prepared its general purpose financial statements in accordance with accounting standards notified under section 133 of the Companies Act, read together with the Companies (Accounting Standards) Rules, 2021 (the "Indian GAAP" or "Previous GAAP") due to which these special purpose financial statements are prepared. In addition, these special purpose financial statements are not the statutory financial statements of ECFPL under the Companies Act. These special purpose financial statements of ECFPL as at and for the year ended March 31, 2023 have been prepared after making suitable adjustments to the accounting heads from their Indian GAAP values following accounting policies and accounting policy choices (both mandatory exceptions and optional exemptions availed as per the Ind AS 101) consistent with that used at the date of transition to the Ind AS (being April 1, 2022) and as per the presentation, accounting policies and grouping/classifications including revised Schedule III to the Companies Act disclosures followed as at and for the year ended March 31, 2025, and which have been approved by the Board of Directors at their meeting held on September 3, 2025.

The Company acquired ECFPL on December 4, 2024. The statutory transition date to the Ind AS for ECFPL was April 1, 2023. For the purpose of preparing the Restated Financial Information, however, the Company adopted a transition date of April 1, 2022. Accordingly, ECFPL applied the same accounting policies and policy choices, including both mandatory exceptions and optional exemptions availed under Ind AS 101 "First-time Adoption of Indian Accounting Standards? as applicable, as on April 1, 2022, consistent with those initially adopted on the statutory transition date of April 1, 2023. This acquisition has been classified as a common control transaction in accordance with Appendix C to Ind AS 103 "Business Combinations". Accordingly, the audited standalone statutory financial statements of the Company for the year ended March 31, 2024, special purpose standalone financial statements of the Company for the year ended March 31, 2023, and audited special purpose financial statements of ECFPL acquired vide this common control transaction for the years ended March 31, 2023 and March 31, 2024 have been combined in accordance with the Guidance Note on Combined and Carve-Out Financial Statements issued by the ICAI. For more details on the acquisition of ECFPL, see "Restated Financial Information - Note 51 - Business Combination Under Common Control" on page 311.

Consequently, a reconciliation of total equity and total comprehensive income between the audited consolidated financial statements for March 31, 2025 and the audited special purpose combined financial statements as at and for the years ended March 31, 2024 and March 31, 2023 has been presented in "Restated Financial Information - Part A - Statement of Adjustments to Audited Consolidated Financial Statements and Audited Special Purpose Combined Financial Statements" on page 280.

The Restated Financial Information was authorised for issue by the Board of Directors on September 4, 2025.

The Restated Financial Information comprises the financial statements of the Company and its Subsidiaries, being entities controlled by the Group, and have been prepared in accordance with Ind AS 110 "Consolidated Financial Statements", as prescribed under section 133 of the Companies Act.

The Group controls an investee only if the Group has power over the investee (that is, existing rights that give it the current ability to direct the relevant activities of the investee), exposure (or rights) to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns. The Group 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 Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Restated Financial Information from the date the Group gains control until the date the Group ceases to control the subsidiary.

The Restated Financial Information is prepared using uniform accounting policies for like transactions and other events in similar circumstances. If a member of the Group used accounting policies other than those adopted in the Restated Financial Information for like transactions and events in similar circumstances, appropriate adjustments are made to that Group member?s financial statements in preparing the Restated Financial Information to ensure conformity with the Group?s accounting policies. The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the parent company, that is, March 31 of the applicable year.

The Restated Financial Information have been prepared by combining like items of assets, liabilities, equity, income, expenses and cash flows of the entities forming part of Group. All the intragroup assets and liabilities, equity, income, expenses and cash flows relating to entities forming part of Group have been eliminated and profits or losses arising from intragroup transactions have been eliminated in full.

Combined financial information are prepared using uniform accounting policies for like transactions and other events in similar circumstances.

The Restated Financial Information has been prepared on accrual basis and under historical cost convention, except for the following:

(a) certain financial assets and liabilities are measured at fair value;

(b) employees? defined benefit obligations and leave encashment are recognised as per their actuarial valuation; and

(c) liability for share-based payments is measured at fair value.

All assets and liabilities have been classified as current and non-current.

An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realised in, or is intended to be sold or consumed in, the normal operating cycle;

(b) it is held primarily for the purpose of trading;

(c) it is expected to be realised within twelve months after the reporting period; or

(d) it is cash or a cash equivalent, unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current when it satisfies any of the following criteria:

(a) it is expected to be settled in the normal operating cycle;

(b) it is held primarily for the purpose of trading;

(c) it is due to be settled within twelve months after the reporting period; or

(d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Based on the nature of the Group?s business and the time interval between the acquisition of assets for processing and the realisation of the acquired assets in cash or cash equivalents, the Group has ascertained its operating cycle as 12 months for the purpose of the classification of assets and liabilities into current and non-current.

The preparation of the Restated Financial Information requires the management to make estimates and assumptions that affect the reported assets and liabilities as at the balance sheet date, reported amount of revenue and expenses for the relevant year, and disclosures of contingent liabilities as at the balance sheet date. Estimates and assumptions used in the Group?s financial statements are based on the management?s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from estimates. Estimates and assumptions are reviewed on a periodic basis. Any revision to accounting estimates is recognised in the year in which the estimates are revised and in any future years affected.

The following are the key estimates and assumptions applied in the preparation of the Restated Financial Information as at the end of the applicable Financial Year that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next Financial Year.

The Group reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. Useful lives of intangible assets are determined on the basis of the estimated benefits to be derived from the use of such intangible assets. These reviews may result in changes in the depreciation or amortisation expense in future periods.

The Group?s liability for defined benefit obligations to employees is determined through an independent actuarial valuation including the determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depends on assumptions determined after taking into account the discount rate, salary growth rate, expected rate of return, mortality and attrition rate. Information about such valuation is provided in the notes to the relevant financial statements. For more information on the actuarial valuation applied, see "Restated Financial Information - Note 42 - Employee Benefits?? on page 296.

In assessing impairment, the management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount it. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

The management?s judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies, claims and/or litigation against the Group as it is not possible to predict the outcome of pending matters with accuracy.

Provisions are recognised in the period when it becomes probably that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires the application of judgement to existing facts and circumstances which may be subject to change. The litigation and claims to which the Group is exposed are assessed by the management, in certain cases with the support of external specialised lawyers.

The management?s judgement is required for the calculation of provisions for income taxes and deferred tax assets and liabilities. The Group reviews at each balance sheet date the carrying amount of deferred tax assets. Factors applied in estimates may differ from actual outcomes which could lead to significant adjustment to the amounts reported in the Restated Financial Information.

The Group evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116 " Leases". The identification of a lease requires significant judgement. The Group hence applies significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Group determines the lease term as the non-cancellable period of a lease, together with the periods covered by an option to extend the lease if it is reasonably certain that the Group will exercise that option, and periods covered by an option to terminate the lease if it is reasonably certain that the Group will not exercise that option. In assessing whether it is reasonably certain that the Group will exercise an option to extend a lease, or not exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Group to exercise the option to extend the lease, or not exercise the option to terminate the lease. The Group revises the lease term if there is a change in the non-cancellable period of a lease. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve the application of judgements and assumptions.

The Group uses a provision matrix to calculate the expected credit loss ("ECL") for trade receivables and contract assets. The provision matrix is initially based on the Group?s historical observed default rates, with such historical rates updated at each reporting date. The assessment of the correlation between historically observed default rates and ECL is a significant estimate. The Group?s historical credit loss experience may in addition not be representative of the customer?s actual default in the future.

For measuring the fair value of equity-settled transactions with employees at the grant date, the Group uses the Black Scholes model for employee stock options. For more information on the assumptions and models applied in estimating the fair value of equity-settled transactions with employees at the grant date, see "Restated Financial Information - Note 49 - Employee stock option plan".

All amounts included in the Restated Financial Information are reported in Indian Rupees (" INR") in million, rounded to two decimal places in accordance with the requirements of Schedule III of the Companies Act, unless stated otherwise. Figures reported as "0" denote amounts that are not zero but that have been rounded to the nearest INR million. INR is both the functional currency of the Group and the currency of the primary economic environment in which it operates.

The Restated Financial Information is prepared on a going concern basis as the management is satisfied that the Group will be able to continue its business in the foreseeable future and no material uncertainty that may cast significant doubt on the going concern assumption exists. In making this assessment, the management has considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows and capital resources.

The following is a summary of the material accounting policies applied in the preparation of the Restated Financial Information. These accounting policies have been applied consistently to all periods presented in the Restated Financial Information.

Property, plant and equipment are stated at the historical cost of acquisition or construction less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises their purchase price net of any discounts and rebates, import duties and other taxes (other than those subsequently recovered from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use.

The Group identifies and determines the cost of each part of an item of property, plant and equipment separately if that part has a cost which is significant to the total cost of that item of property, plant and equipment and has a useful life that is materially different from that of the remaining item.

Subsequent costs are included in the item?s 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 Group 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 year in which they are incurred.

Interest cost incurred is capitalised up to the date the asset is ready for its intended use for qualifying assets, based on borrowings incurred specifically for financing the asset or the weighted average rate of all other borrowings, if no specific borrowings have been incurred for the asset.

Depreciation on property, plant and equipment is provided on a pro-rata basis on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, or re-assessed by the Group. The useful life, residual value and the depreciation method are reviewed at least at each financial year end. If the expectations differ from previous estimates, the changes are accounting for prospectively as a change in the accounting estimate.

Depreciation on additions to property, plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on the sale of or deduction from property, plant and equipment is provided up to the date preceding the date of sale or deduction, as the case may be. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and included in the Group?s statement of profit and loss under other income and other expenses respectively.

The cost of assets not ready for their intended use, as on the balance sheet date, is shown as capital work in progress. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the management, and borrowing costs. Expenses directly attributable to the construction of property, plant and equipment that were incurred up to such asset being ready for its intended use are identified and allocated on a systematic basis on the cost of related assets.

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the asset?s estimated useful life to reflect the pattern in which the asset?s economic benefits are consumed. The estimated useful life of an asset and the amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimates being accounted for on a prospective basis. The amortisation of intangible assets is included in depreciation and amortisation expenses in the Group?s Statement of Profit and Loss.

Software is amortised over the managements estimate of its useful life, being 6 years.

Each intangible asset with a finite life is assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset?s recoverable amount. An asset?s recoverable amount is the higher of the asset?s or cash-generating unit?s ("CGU") fair value less the costs of its disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value-in-use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Group bases its impairment calculations on most recent budgets and forecast calculations, which are prepared separately for each of the Group?s CGUs to which the individual assets are allocated.

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

Inventories are valued at the lower of cost or net realizable value. The cost raw materials, stores spares, packing materials and others includes the cost of purchase and other costs incurred in bringing the inventories to their present location and condition. The cost of purchased inventory is determined after deducting rebates and discounts. For finished goods and work-in-progress, the cost includes the cost of direct material and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excludes borrowing cost.

Spare parts that do not constitute property, plant and equipment are carried as inventory.

Transit stocks are valued at cost.

Cash and cash equivalents in the balance sheet comprises cash at banks, cash on hand, and fixed deposits having an original maturity of less than three months which are subject to an insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby net profits before tax are adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Group are segregated.

On initial recognition, transactions in foreign currencies entered into by the Group are recorded in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

Foreign currency monetary items of the Group are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date at which the fair value is measured.

Exchange differences arising out of foreign exchange translations and settlements during the year are recognised in the Consolidated Statement of Profit and Loss.

On consolidation, the assets and liabilities of foreign operations are translated into INR at the exchange rate prevailing at the reporting date and their statements of profit and loss are translated at exchange rates prevailing at the dates of the transactions.

Any exchange differences arising from the translation of foreign operations are recognised in the Consolidated Statement of Other Comprehensive Income. These exchange differences are accumulated in equity under a separate component known as the foreign currency translation reserve.

Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or a present obligation that arises from past events, and either it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

Contingent assets are possible assets that arise from past events and which existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent asset is disclosed where an inflow of economic benefits is probable.

The Group measures certain financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability that is accessible to the Group.

The best estimate of the fair value of a financial instrument on initial recognition is normally the transaction price, being the fair value of the consideration given or received. If the Group determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value and adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is recognised in the Statement of Profit and Loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

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

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

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

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

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

At initial recognition, in the case of a financial asset measured not at fair value through profit or loss, the financial asset is measured at its fair value plus the transaction cost directly attributable to the acquisition of the financial asset. Transaction costs directly attributable to the acquisition of financial assets measured at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss. However, trade receivables that do not contain a significant financing component are measured at the transaction price.

For purposes of subsequent measurement, financial assets are classified in the following categories: (a) at amortised cost;

(b) at fair value through other comprehensive income; or

(c) at fair value through profit or loss. The classification depends on the entity?s business model for managing the financial assets and the contractual terms of the cash flows.

• Amortized cost - Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. 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 amortization is included in finance income in the Statement of Profit and Loss.

• Fair value through other comprehensive income - Assets that are held for the collection of contractual cash flows and for selling the financial assets, where the assets? cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the statement of profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to the Statement of Profit and Loss and recognised in other gains or losses.

• Fair value through profit or loss - Assets that do not meet the criteria for amortised cost or measurement at fair value through other comprehensive income are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at fair value through profit or loss. For all other equity instruments, the Group may make an irrevocable election to present subsequent changes in the fair value under other comprehensive income. The Group makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments classified as at fair value through other comprehensive income, all fair value changes on the instrument, excluding dividends, are recognised under other comprehensive income. There is no recycling of the amounts from other comprehensive income to the Statement of Profit and Loss, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity. Equity instruments measured at fair value through profit or loss are measured at fair value with all changes recognised in the statement of profit and loss.

In accordance with Ind AS 109 "Financial Instruments ", the Group applies the ECL model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure.

• For trade receivables, the Group follows the "simplified approach" for recognition of impairment loss allowance on trade receivables resulting from transactions within the scope of Ind AS 115 "Revenue from Contracts with Customers ". The application of the simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, from its initial recognition.

• For other financial assets, the Group recognises impairment loss on financial assets and risk exposure by determining whether credit risk has increased significantly since initial recognition. If credit risk has not increased significantly, the 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, the lifetime ECL is used. If in subsequent years, the credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, the entity then reverts to recognizing impairment loss allowance based on the 12-month ECL. Lifetime ECL is the expected credit loss resulting from all possible default events over the expected life of a financial instrument. 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the year end.

ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all cash flows that the entity expects to receive (that is, all shortfalls), discounted at the original effective interest rate (EIR). When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.

ECL impairment loss allowance (or reversal) recognised during the year is recognised as income/expense in the statement of profit and loss. For financial assets measured 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. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Group does not reduce impairment allowance from the gross carrying amount.

The Company derecognises a financial asset only when the rights to receive the cash flows from the asset expire or are transferred, or if it retains the contractual rights to receive the cash flows from the asset but assumes a contractual obligation to pay the received cash flows in full without material delay to one or more recipients.

Where the financial asset is transferred, the asset is derecognised only if substantially all risks and rewards of ownership of the asset are transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where the financial asset is not transferred and the relevant entity does not retain substantially all risks and rewards of ownership of the asset, the asset is derecognised only if the Group has not retained control of the asset. In such case, the Group 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 Group has retained.

On derecognition of a financial asset, the difference between the carrying amount and the consideration received is recognised in the Statement of Profit and Loss.

An instrument issued by a Group is classified as either a financial liability or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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

At initial recognition, financial liabilities are classified as financial liabilities at fair value through profit or loss or at amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transaction costs.

After initial recognition, subsequent measurement of financial liabilities depends on their classification, as follows:

• financial liabilities measured at fair value through profit or loss - Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss;

• derivative financial instruments - The Group uses derivative financial instruments, primarily foreign exchange forward contracts, to manage its exposure to foreign exchange risk. These contracts are generally entered into with banks as counterparties. Derivatives that are not designated as hedging instruments, or those designated as hedges but deemed ineffective under Ind AS 109, are accounted for as financial assets or financial liabilities at fair value through profit or loss. Such derivatives are initially recognised at fair value on the contract date, with any attributable transaction costs recognised in the Statement of Profit and Loss when incurred. Subsequently, these derivatives are re-measured at fair value through profit or loss, and any resulting gains or losses are recorded in other income or other expenses. Derivatives with a positive fair value are classified as financial assets, while those with a negative fair value are classified as financial liabilities;

• borrowings - Interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised as well as through the effective interest rate 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 effective interest rate. The effective interest rate amortisation is included as finance costs in the Statement of Profit and Loss. The entitys long-term borrowings are all at a variable interest rate. Therefore, the unamortised transaction costs incurred on these borrowings are amortised on a straight-line basis instead of using the effective interest rate method; and

• financial liabilities at amortised cost - All the financial liabilities of the Group are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised as well as through the effective interest rate 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 effective interest rate. The effective interest rate amortisation is included as finance costs in the Statement of Profit and Loss.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such replacement or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss as finance costs.

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the assets and settle liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

Corporate guarantees given are treated as deferred income and amortised over the term of the guarantee on a systematic basis. The amortisation is recognised under other income in the Statement of Profit and Loss, reflecting the usage pattern of the guarantees.

As a lessee, at inception of a contract, the Group 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. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• the contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset.

If the supplier has a substantive substation right, then the asset is not identified;

• the Group has the right to substantially all of the economic benefits from the use of the asset throughout the period of use; and

• the Group has the right to direct the use of the asset. The Group has this right when it has the decisionmaking rights that are most relevant to changing how and for what purposes the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either the Group has the right to operate the asset, or the Group designed the asset in a way that predetermines how and for what purposes it will be used.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. 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 earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful life of a right-of-use asset is determined on the same basis as the useful life of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, Group?s incremental borrowing rate. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group?s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of- use asset has been reduced to zero.

The Group has elected to not recognise leases with a lease term of 12 months or less, or of low value in the balance sheet, and lease costs for those short-term leases or low-value leases are recognised on a straight-line basis over the lease term in the Statement of Profit and Loss. For practicality and expediency, the Group has elected to apply the lessee practical expedient to combine lease and non-lease components and account for the combined unit as a single lease component.

The Groups gratuity benefit scheme is a defined benefit plan. The Groups net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, and discounting the benefit to determine its present value. The present value of obligations under such benefit plan is determined based on an actuarial valuation using the projected unit credit method which recognises each period of service that gives rise to additional units of employee benefit entitlement and measures each unit separately to build up to the final obligation. Obligation is measured at present values of estimated future cash flows, with the discounted rates used for determining the present values based on market yields on government securities as at the balance sheet date.

Defined benefit costs are categorized into:

• the current service cost of the defined benefit plan, which is recognised in the Statement of Profit and Loss under employee benefits expense, and which reflects the increase in the defined benefit obligation resulting from employees? service in the current year, benefit changes, curtailments and settlements (past service costs, which comprise plan amendments and curtailments, and gains or losses on the settlement of pension benefits, are recognised immediately in the Statement of Profit and Loss when they occur;

• the net interest cost, which is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets, and is included under finance cost in the Statement of Profit and Loss; and

• re-measurements, which comprise actuarial gains and losses and the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), and which are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.

Contributions to defined contribution plans are recognised as an expense when employees have rendered services entitling them to such benefits. The Group provides benefits treated as defined contribution plans to its employees, such as a provident fund.

Employee benefits payable wholly within 12 months of receiving the employee?s services are classified as shortterm employee benefits and are recognised in the period in which the employee renders the related service. These benefits include salaries and wages, bonus and ex-gratia payments. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.

Compensated absences which are expected to occur within 12 months after the end of the period in which the employee renders the related services are recognised as an undiscounted liability at the balance sheet date. Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognised using the projected unit credit method as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date.

For the purpose of the presentation of defined benefit plans and compensated absences, the allocation between current and non-current provisions has been as determined by an actuary.

Revenue from contracts with customers is recognised on transfer of control of the promised goods or services to a customer at an amount that reflects the consideration which the Group is expected to be entitled to in exchange for those goods or services. Such amount is measured at the transaction price (net of variable consideration) allocated to that performance obligation. Revenue (net of variable consideration) is recognised only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.

In respect of the sale of products, the performance obligation is satisfied at the relevant point in time specified in the contract, such as when the goods are shipped to the customer or on delivery to the customer. Revenue from the sale of products is hence recognised when the control on the goods have been transferred to the customers.

Revenue from rendering services is recognised over time by measuring the progress made towards satisfaction of the performance obligations for the services rendered.

Grants are recognised as income when there is a reasonable assurance that the Group will comply with all necessary conditions attached to them and the grant or subsidy will be received in accordance with Ind AS 20

Revenue from export incentives, including those arising under the Remission of Duties and Taxes on Exported Products Scheme ("RODTEP"), Merchandise Exports from India Scheme ("MEIS"), Terminal Excise Duty ("TED"), and Duty Drawback Scheme, is recognised on an accrual basis, post-export, at the rates at which the entitlements accrue.

Income from the above grants and subsidies is presented under the other operating income segment of revenue from operations.

Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, being the rate that discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.

For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate, which is the rate that discounts exactly the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to that financial asset?s net carrying amount.

Interest income is included under other income in the Statement of Profit and Loss.

Tax expenses for a year, comprising current tax and deferred tax, are included in the determination of the net profit or loss for that year.

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provisions arising in the same tax jurisdiction, where the Group intends to settle the asset and liability on a net basis. Current income tax relating to items recognised outside the Statement of Profit and Loss is recognised in correlation to the underlying transaction either under other comprehensive income or directly under equity. The management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax is recognised on temporary differences, being differences between the carrying amount of assets and liabilities and corresponding tax bases used in the computation of taxable profit. Deferred tax is measured using the tax rates and tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all temporary differences. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Group has a legally enforceable right to such set off.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognised outside the Statement of Profit and Loss is recognised outside profit or loss, either in other comprehensive income or in equity. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

The basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events that have changed the number of equity shares outstanding without a corresponding change in resources, such as an issue of bonus shares, other than the conversion of potential equity shares.

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

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, and which operating results are regularly reviewed by the Group?s chief operating decision maker to make decisions for which discrete financial information is available.

The Group is engaged in the selling of goods and the chief operating decision maker has identified the entire business to be a single reportable segment, namely manufacturing of technical textiles fabrics. Hence, segment reporting is not applicable to the Group. For more details, see "Restated Financial Information - Note 45 - Segment Reporting" on page 303.

The fair value of options granted under the Group?s employee stock option scheme (measured as the excess of the fair value over the exercise price of the option at the date of grant) is recognised as an employee benefit expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, including any market performance conditions (for example, the entity?s share price) and the impact of any non-vesting conditions (for example, the requirement for employees to save or hold shares for a specified time period), and excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period).

Together with a corresponding increase in the share options? outstanding account in equity, that cost is recognised under employee benefits expense over the period in which the performance and/or service conditions are fulfilled.

The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group?s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised under employee benefits expense. The dilutive effect of outstanding options is reflected as an additional share dilution in the computation of diluted earnings per share.

For more details on employee stock compensation cost, see "Restated Financial Information - Note 49 - Employee stock option plan" on pages 309.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to be readied for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs comprise interest and other costs incurred in connection with the borrowing of funds.

A common control business combination refers to a business combination involving entities in which all the combining entities are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory.

Business combinations involving entities or businesses under common control have been accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments have been made to reflect fair values, or to recognise any new assets or liabilities.

The financial information in the Restated Financial Information in respect of prior periods has been restated as if the business combination had occurred from the beginning of the earliest period presented in the Restated Financial Information, irrespective of the actual date of the combination. This is with the exception of business combinations that have occurred after that beginning date, for which the information in respect of the prior period has been restated only from the date of the business combination.

The difference, if any, between the purchase consideration paid either in the form of share capital or cash or other assets and the amount of net assets of the entities acquired is transferred to capital reserve (in the case of credit balance) and the common control adjustment deficit account (in the case of debit balance), and presented separately from other reserves within equity.

Our total income consists of revenue from operations and other income.

Our revenue from operations is generated from:

(i) revenue from contracts with customers, which includes revenue from

(a) the sale of products (being manufactured goods) and

(b) the sale of services; and

(ii) other operating income, which includes revenue from

(a) government grants,

(b) duty drawback,

(c) Remission of Duties and Taxes on Exported Products scheme (the "RODTEP") income,

(d) sale of scrap,

(e) Merchandise Exports from India Scheme (the "MEIS") income and

(f) Terminal Excise Duty ("TED") income.

Our other income consists of:

(i) foreign exchange gain;

(ii) interest income, which includes

(a) interest income on fixed deposits,

(b) interest income on the unwinding of discounts on security deposits and

(c) other interest income;

(iii) allowance for ECL reversal;

(iv) profit on the sale of assets;

(v) sundry balance written back; and

(vi) miscellaneous income.

Components of our miscellaneous income for the past three Fiscals have included interest subsidy for a term loan.

Our total expenses consist of:

(i) cost of materials consumed;

(ii) changes in inventories of finished goods and semi-finished goods;

(iii) employee benefits expense;

(iv) finance costs;

(v) depreciation and amortisation expense; and

(vii) other expenses.

Our cost of materials consumed is the net of our opening stock plus the purchases during the relevant financial year less our closing stock.

Our changes in inventories of finished goods and semi-finished goods indicate the difference between inventory of finished stock and semi-finished stock at the beginning of the year, and at the end of the year.

Our employee benefits expense consists of:

(i) salaries and wages;

(ii) staff welfare expenses;

(iii) contributions to provident and other funds (including superannuation funds and new pension schemes);

(iv) share based payments to employees;

(v) leave encashment expenses; and

(vi) gratuity expenses.

Our finance costs consist of:

(i) interest expense, which include

(a) interest expense on borrowings, and

(b) interest expense on lease liabilities; and

(ii) bank and other finance charges.

Our depreciation and amortisation expense consists of:

(i) depreciation of property, plant and equipment;

(ii) depreciation on right-of-use assets; and

(iii) amortisation of intangible assets.

Our other expenses primarily consist of:

(i) power and fuel;

(ii) job work and labour charges (including charges arising from transactions with related parties);

(iii) royalty expenses;

(iv) consumption of stores;

(v) travelling and conveyance;

(vi) freight and forwarding charges;

(vii) professional and legal fees; and

(viii) miscellaneous and administration expenses. Components of our miscellaneous expenses (other than administration expenses) for the past three Fiscals have included factory expenses, postage and courier and telegrams, and membership fees. For more details on certain of our job work and labour charges, see "Restated Financial Information - Note 43 - Related Party Disclosures? on page 299.

Our tax expenses consist of:

(i) current tax;

(ii) short provision for tax relating to prior years; and

(iii) deferred tax expense/(credit).

The following table sets forth a summary of our restated statement of profit and loss for the fiscal years indicated and such amounts expressed as a percentage of total income.

Set forth below is a table showing our revenue from operations for Fiscals 2025 and 2024.

Our revenue from operations increased by 66.49% to Rs.7,789.97 million for Fiscal 2025 from Rs.4,679.08 million for Fiscal 2024, which increase was primarily due to a 68.99% increase in our revenue from contracts with customers, which is discussed below.

Our revenue from contracts with customers increased by 68.99% to Rs.7,700.95 million for Fiscal 2025 from Rs.4,556.94 million for Fiscal 2024, which increase was primarily due to an increase in our revenue from Aerospace and Defence Fabrics, Aerospace and Defence Solutions and Outdoor and Lifestyle Fabrics.

The table below sets forth our revenue from contracts with customers from our four primary market segments, and from sales falling outside of those four market segments, for Fiscal 2025 and Fiscal 2024.

Our revenue from Aerospace and Defence Fabrics increased by 18.06% to Rs.3,700.92 million for Fiscal 2025 from Rs.3,134.88 million for Fiscal 2024, which increase was primarily due to an increase in the volume of orders, as well as a change in our product mix. The increase in the volume of orders was primarily attributable to customers outside India.

Our revenue from Aerospace and Defence Solutions increased to Rs.2,219.02 million for Fiscal 2025 from Rs.8.64 million for Fiscal 2024. This increase was primarily due to a large order for Combat Free Fall (CFF) parachute systems, which was a new product introduced by us in Fiscal 2025. We recognised a revenue of Rs.2,225.88 million from this large order for Fiscal 2025.

Our revenue from Outdoor and Lifestyle Fabrics increased by 95.10% to Rs.569.00 million for Fiscal 2025 from Rs.291.65 million for Fiscal 2024. This increase was primarily due to an increase in our final output capacity (comprising the aggregate installed capacity of our processing, dyeing, finishing, printing and coating factories) to 127.80 million metres as at March 31, 2025 from 48.86 million metres as at March 31, 2024. Our final output capacity increased due to our commencement of operations at an additional manufacturing facility located at Kothwa, Taluka Mangrol, District Surat, Gujarat, India on April 1, 2024. We use this manufacturing facility for scouring, dyeing, finishing, processing and coating nylon and polyester fabrics. For more details on our manufacturing capabilities, see "Our Business - Manufacturing Capabilities?? on page 192.

Other operating income decreased by 27.12% to Rs.89.02 million for Fiscal 2025 from Rs.122.14 million for Fiscal 2024, which was primarily due to a decrease in government grants.

Other income increased by 68.82% to Rs. 112.15 million for Fiscal 2025 from Rs.66.43 million for Fiscal 2024. This increase was primarily due to an increase in foreign exchange gain to Rs.46.95 million for Fiscal 2025 from Rs.32.40 million for Fiscal 2024, and an increase in interest income on fixed deposits to Rs.57.57 million for Fiscal 2025 from Rs.29.52 million for Fiscal 2024.

Set forth below is a table showing the components of our cost of materials consumed and changes in inventories of finished goods and semi-finished goods for Fiscals 2025 and 2024.