1.19 Provisions and Contingent Liabilities

Provisions are recognised when the company has a present
obligation (legal or constructive) because of a past event,
for which it is probable that a cash outflow will be required,
and a reliable estimate can be made of the amount of
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, it’s
carrying amount is the present value of those cash flows
(when the effect of time value of money is material). These
are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates.

When the Company expects some or all the provision to be
reimbursed, the reimbursement is recognised as a separate
asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in the
Statement of Profit and Loss net of any reimbursement.

Contingent liabilities are disclosed when the company
has a possible obligation, or a present obligation and it is
probable that an outflow of resources will not be required
to settle the obligation, or the amount of obligation cannot
be measured with sufficient reliability.

1.20 Significant Accounting Judgments, Estimates and
Assumptions

The preparation of standalone financial statements requires
management to make judgments, estimates and assumptions

that affect the reported amounts of revenues, expenses,
assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of
assets or liabilities affected in future years.

(i) Useful lives of property, plant and equipment and
intangible assets:

As described in the significant accounting policies,
the Company reviews the estimated useful lives of
property, plant and equipment and intangible assets
at the end of each reporting period.

(ii) Actuarial valuation:

The determination of Company’s liability towards
defined benefit obligation to employees is made
through independent actuarial valuation including
determination of amounts to be recognised in
the Statement of Profit and Loss and in other
comprehensive income. Such valuation depends upon
assumptions determined after considering inflation,
seniority, promotion and other relevant factors such
as supply and demand factors in the employment
market. Information about such valuation is provided
in notes to the standalone financial statements.

(iii) Impairment of assets:

The evaluation of applicability of indicators of
impairment of assets requires assessment of several
external and internal factors which could result in
deterioration of recoverable amount of the assets.

(iv) Recoverability of advances/receivables:

Management reviews its receivables for objective
evidence of impairment at least quarterly. Significant
financial difficulties of the debtor, the probability
that the debtor will enter bankruptcy, and default or
significant delay in payments are considered objective
evidence that a receivable is impaired. In determining
this, management makes judgement as to whether
there is observable data indicating that there has been
a significant change in the payment ability of the debtor,
or whether there have been significant changes with
adverse effect in the technological, market, economic
or legal environment in which the debtor operates in.

Where there is objective evidence of impairment,
management makes judgements as to whether an
impairment loss should be recorded as an expense.
In determining this, management uses estimates
based on historical loss experience for assets with
similar credit risk characteristics.

2.02.1 The Company holds an investment in an Associate, Kitex USA LLC, which amounts to 2,776.24 lakhs (March 31,2024: 2,776.24
lakhs) as on March 31,2025. The Company also, has trade receivables due from the aforesaid Associate company amounting to
12,277.57 lakhs (March 31,2024: 10,225.12 lakhs) as at March 31,2025. The Associate Company has been reporting continuous
losses, and this has fully eroded its net worth as on that date. The management of the Company has evaluated the fair valuation
of the investments and the recoverability of trade receivables by considering various factors like change in business plan due
to business deal entered with major customers, who are leaders in market, and with whom the Associate have already started
shipping test orders to the targeted customers for their distribution to selected stores. Based on these factors, the management
of the Company believes that the store expansion of the above customer in United States, Mexico and Europe will add value
to the business of the Associate and will lead to increased projected revenue and higher contribution margins. Accordingly,
the management of the Company considers that the fair value of the investment in the Associate is higher than the carrying
value and based on the change in business plan assessed, the trade receivables of the Associate in the Company as good
and recoverable as on March 31, 2025. Hence, no material adjustments would be required to be made to the carrying value of
the investments and trade receivables of the Associate in the standalone financial results of the Company for the year ended
March 31, 2025.

2.02.2 With effect from Financial year 2024-25 Company have entered into an agreement with Kitex Apparel Parks limited receive
commission for corporate guarantees provided against borrowings availed from banks. Accordingly, the fair value adjustment
previously recognised in investment during FY 2023-24 in line with IND AS 109, in respect of guarantees given at concessional
terms from aforesaid mentioned subsidiary Company, has been reassessed. The unutilised portion of the adjustment has been
reversed, as the guarantees are now considered to be on arm’s length terms.

2.08 Trade Receivables (Contd..)

2.08.2 During 2017-18, TOYS "R" US, Inc., a customer of the Company had filed a petition in the Bankruptcy Court in the United States
to wind down its US operation. Provision of 347.03 lakhs was made for the receivables towards loss, if any on recovery of
receivables in the same year. After the hearings at the US Bankruptcy court on September 6, 2018 and November 13, 2018, Plan
submitted under Chapter 11 was confirmed. The claim allowed to the Company aggregates to 7,539.29 lakhs. Consequently,
the provision carried in the books of 347.03 lakhs was written back during 2018-19. Later,Company has received interim
disbursement of 13.21 lakhs during the year and 1,890.92 lakhs in earlier years from the liquidator of TOY"R" US, Inc. Trade
receivables includes 410.35 lakhs (March 31, 2024: 399.77 lakhs) receivable from TOYS R US as on March 31, 2025.

2.08.3Company has accounted receivable denominated in Foreign currency to the tune of 9,218.49 lakhs which is outstanding for
more than one year. Company has taken active measures to regularise the delay with AD Bank for compliance with the provision
of Foreign Exchange Management Act, 1999 (FEMA) read with rules notified therewith.

2.26.1The Company is in receipt of the Government Grant/Assistance as defined under Ind AS 20 - 'Accounting for Government

Grants and Disclosure of Government Assistance’ as under:

(i) Grants in the nature of Merchandise Export Incentive Scheme, Rebate of State & Central Taxes and Levies, Remission on
Duties and Taxes on Exported Products and Duty Drawback are disclosed under the head 'Export Entitlements' in other
operating revenue.

(ii) Grants in the nature of Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Scheme being re-imbursement of employer’s
contribution to employee provident fund is deducted in the employee benefit expense amounting to Nil (31.03.2024: Nil).

(iii) Grants in the nature of re-imbursement of cost towards capital asset under the Technology Upgradation Fund Scheme
(TUFS) and Integrated Skill Development Scheme (ISDS) Project which is disclosed as deferred grant. The amount is
disclosed under the head 'Other Income’ in the proportions in which depreciation expense on those assets is recognised.

2.26 Other Income (Contd..)

(iv) Grants in the nature of re-imbursement of interest cost on borrowings under the TUFS is disclosed under the head
'Other Income’.

(v) Grants in the nature of re-imbursement of expenditure under the ISDS Project is deducted from the heads of related expenses.

(vi) EPCG authorisation is obtained by the Company from Directorate General of Trade as import duty waiver over procurement
of capital goods defined in Foreign Trade Policy 2015-20. The Company has deferred the grant in the books and it will be
amortised in the books as and when the conditions attached (export obligation) to authorisations are fulfilled.

2.35 Fair Value Measurement

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the
carrying amounts of these items due to their short-term nature.

There were no transfers between Level 1 and Level 2 during the year.

2.36 Financial Risk Management - Objectives and Policies

The Company has a well managed risk management framework, anchored to policies and procedures and internal financial controls
aimed at ensuring early identification, evaluation and management of key financial risks (such as liquidity risk, market risk, credit risk
and foreign currency risk) that may arise as a consequence of its business operations as well as its investing and financing activities.
Accordingly, the Company’s risk management framework has the objective of ensuring that such risks are managed within acceptable
risk parameters in a disciplined and consistent manner and in compliance with applicable regulation.

1) Liquidity risk

Liquidity risk is the risk that the Company will encounter due to difficulty in raising funds to meet commitments associated with
financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to
sell a financial asset quickly at close to its fair value.

The Company has sound financial strength represented by its aggregate current assets as against aggregate current liabilities
and its strong equity base and low working capital debt. In such circumstances, liquidity risk does not exist.

2.37 Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to
the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to
continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

The Company’s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth
and creation of sustainable stakeholder value. The Company funds its operations through internal accruals. The Company aims at
maintaining a strong capital base largely towards supporting the future growth of its businesses as a going concern.

As at March 31, 2025, the Company has only one class of equity shares and is virtually debt-free. The company is not subject to any
externally imposed capital requirements.

2.44 In the opinion of the Directors, short term loans and advances and other current assets, have the value at which they are stated
in the balance sheet, if realised in the ordinary course of business.

2.45 Subsequent event

Dividends declared by the Company are based on the profit available for distribution. Distribution of dividends out of retained earnings
is subject to applicable tax deducted at source (TDS). On May 29 ,2025 Board of Directors of the Company have proposed a final
dividend of 0.50 per share in respect of the year ended March 31,2025 subject to the approval of shareholders at the Annual General
Meeting. The proposal if approved, would result in a cash outflow of approximately 997.50 Lakhs.

2.46 Note on Ultimate Beneficiaries

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”) with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company
(Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether,
directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

2.47 Note on Audit Trail

The Company has used two accounting softwares for maintaining its books of account which has a feature of recording audit trail
(edit log) facility and has been operated throughout the year for all relevant transactions recorded in the software and same has not
been tampered with except

• for one of the software the database is maintained by third party service provided and in absence of independent auditors report,
management is unaware whether audit trail feature is enabled in database maintained by the third party.

• For one of software audit trial feature was not enabled for FY 2024-25

Additionally, the audit trail of prior years has been preserved by the Company as per the statutory requirements for record retention to
the extent it was enabled and recorded in previous years

2.48 Other Disclosures

(a) Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
- The Company does not have any transactions or relationships with any struck off Companies

(b) Details of Benami Property held - The Company does not have any Benami property, where any proceeding has been initiated or
pending against the company for holding any Benami property.

(c) Undisclosed income - The Company does not have any undisclosed income which is not recorded in the books of account that
has been surrendered or disclosed as income during the year / previous year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(d) Registration of charges or satisfaction with Registrar of Companies - The Company does not have any charges or satisfaction
which is yet to be registered with ROC beyond the statutory period.

(e) Details of Crypto Currency or Virtual Currency - The Company has not traded or invested in Crypto currency or Virtual Currency
during the financial year.

2.48 Other Disclosures (Contd..)

(f) Pursuant to the meeting of Board of directors held on February 14, 2025, approval was granted for the Scheme of Arrangement
between Kitex Childrenswear Limited (KCL) and the Company and their respective shareholders and creditors, in compliance
with Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, providing for demerger of textile business
of KCL into the Company, which will be given effect on obtaining the necessary regulatory approvals.

(g) "TheCode onSocial Security 2020-TheCode on Social Security 2020('theCode')relatingto employee benefits, duringtheemployment
and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India.
Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective
date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in
which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary
assessment, the entity believes the impact of the change will not be significant."

(h) Compliance with number of layers of companies - The Company has complied with the number of layers prescribed under clause
(87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

2.49 Previous year figures, unless otherwise stated are given within brackets and have been re-grouped and recast wherever necessary

to be in conformity with current year's disclosure.

As per our report of even date attached

For M S K A & Associates For and on behalf of the Board of Directors of

Chartered Accountants Kitex Garments Limited

Firm Registration No. 105047W CIN: L18101KL1992PLC006258

Geetha Jeyakumar Sabu M Jacob Sindhu Chandrasekharan

Partner Chairman & Whole-time Director

Membership No.029409 Managing Director DIN:06434415

DIN:00046016

Boby Michael Dayana Joseph

Chief Financial Officer Company Secretary

ICSI M.No.A61808

Place : Chennai Place : Kizhakkambalam

Date: June 23, 2025 Date: June 23, 2025