Accounting Policies of Kaytex Fabrics Ltd. Company

Mar 31, 2025

Kaytex Fabrics Limited (The Company) is a Limited Company domiciled in India incorporated as a private limited company
under the provisions of the Companies Act, 2013. The name of the company has been changed to Kaytex fabrics Limited
during the financial year The Company is engaged in the business of manufacturing, buying, selling and exporting fabrics.

SIGNIFICANT ACCOUNTING POLICIES AND EXPLANATORY NOTES ON FINANCIAL STATEMENTS FOR
PERIOD ENDING 31.03. 2025

1.1 Basis of preparation of financial statements

(a) The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in
India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with
the provisions of the Companies Act, 2013 and the Companies (Accounting Standards) Rules 2014, as prescribed.
The financial statements have been prepared under the historical cost convention on accrual basis.

(b) The preparation of the financial statements requires management to make estimates and assumption that affect the
reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements
and the results of operations during the reporting period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ from these estimates.

(c) All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle
and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time
between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has
ascertained its operating cycle as twelve months for the purpose of current- non current classification of assets and
liabilities.

1.2 Revenue Recognition

(a) The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on
accrual basis.

(b) Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and the
revenue can be reliably estimated and collectability is reasonably assured.

(c) Revenue from sale of goods and services are recognised when control of the products being sold is transferred to our
customer and when there are no longer any unfulfilled obligations. The performance obligations in our contracts are
fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.

(d) Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any taxes or
duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is used to
estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly
probable a significant reversal will not occur.

(e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate
applicable.

(f) The segregation of Revenue Generated is as follows

1.3 Property, Plant & Equipment and Intangible Assets & Depreciation

(a) Property, Plant and Equipment is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its purchase
price including import duties and non-refundable purchase taxes after deducting trade discounts, rebates and any
directly attributable cost of bringing the item to its working condition for its intended use.

(b) 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. All other repairs and maintenance cost are charged to the statement of profit and loss
during the period in which they are incurred.

(c) Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net disposal
proceeds and the carrying value of property, plant and equipment and are recognised in the statement of profit and loss
when the same is derecognised.

(d) Depreciation is calculated on pro rata basis on Written Down Value Method (WDV) based on estimated useful Life as
prescribed under Part C of Schedule - II of the Companies Act, 2013. Freehold land is not depreciated.

(e) Intangible assets are stated at costs less accumulated amortization.

1.4 Investments

Investments classified as long-term investments are stated at cost. Provision is made to recognize any diminution other
than temporary in the value of such investments. Current investments are carried at lower of cost and fair value.

1.5 Inventories

Inventories consisting of Raw Materials, W-I-P, Finished Goods, Stores and Spares and Stock-in-trade are stated ''at cost''.
Cost of inventories comprises of cost of purchase, cost of conversion and other costs and expenses incurred in bringing the
inventories to their present location and condition. Due allowance is estimated and made for defective and obsolete items,
wherever necessary, based on the past experience of the company.

1.6 Employee Benefits

The Company has made necessary provisions of gratuity as per The Payment of Gratuity Act, 1972.

Provision for Gratuity has been considered as per Acturial valuation report.

Leave encashment to the employees are accounted for on regular basis to eligible employees.

1.7 Borrowing Costs

(a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period until
the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to
get ready for its intended use.

(b) Other Borrowing costs are recognized as expense in the period in which they are incurred.

1.8 Taxes on Income

Tax expense comprises of current tax and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the
applicable tax rates and tax laws.

Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent
periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is
recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of
prudence.

1.9 Earnings per Share (EPS)

(a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.

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

2.0 Prior Period Items

Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods
presented in which the error occurred.