3.20' Provisions, Contingent Liabilities and Contingent Assets.

Provisions are recognized when the Company has a present obligation (legal or constructive) 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 a reliable estimate can be made 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.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a
current pre-tax rate that reflects the current market assessments of the time value of money and the risks
specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost.

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 Company or a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the
amount cannot be made.

Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations
under the contract exceed the economic benefits expected to be received under it, are recognized when it is
probable that an outflow of resources embodying economic benefits will be required to settle a present
obligation as a result of an obligating event based on a reliable estimate of such obligation."

3.21 Lease

The Company's lease asset classes consist of leases for Land and Buildings, Plant & Equipment, Furniture and
Fixtures & Office Equipment's. The Company assesses whether a contract is or contains a lease, at inception of
a contract. 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 Company assesses
whether:

- The contract involves the use of an identified asset.

- The Company has substantially all of the economic benefits from use of the asset through the period of the
lease and,

- The Company has the right to direct the use of the asset.

As a lessee

- At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short- term leases) and leases of low value assets. Financial Statements recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease.

- The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses, if any. Right-of- use assets are depreciated from the commencement date on a straight-line
basis over the shorter of the lease term and useful life of the underlying asset.

- The lease liability is initially measured at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates. The lease liability is subsequently remeasured by increasing. the carrying amount to reflect
interest on the lease liability and reducing the carrying amount to reflect the lease payments made.

- A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a
change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the
leased assets.

3.22 Offsetting of Assets and Liabilities

The financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when there
is a current legally enforceable right to set-off the recognized amounts and it is intended to either settle on net
basis or to realize the asset and settle the liability simultaneously.

3.23 Cash and Cash Equivalents

Cash and cash equivalents comprise of cash in hand, demand deposits and short-term highly liquid investments
that are readily convertible into a known amount of cash and which are subject to an insignificant risk of changes
in value.

All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly
attributable transaction costs.

3.24 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit after tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals, or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. The cash flows are
segregated into operating, investing, and financing activities.

3.25 Financial Instruments

- 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.

- Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. These statements are prepared under historical cost convention on accrual basis.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the
category in which they are classified.

3.26 Financial Assets

All recognized financial assets are subsequently measured in their entirety at either amortized cost using the
effective interest method or fair value, depending on the classification of the financial assets.

Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is determined at
the time of initial recognition. The Company classifies its financial assets in the following measurement
categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and those measured at amortized cost.

- The classification depends on the entity's business model for managing the financial assets and the contractual
terms of the cash flows.

- A financial asset that meets the following two conditions is measured at amortized cost unless the asset is
designated at fair value through profit or loss under the fair value option:

- Business model test: the objective of the Company's business model is to hold the financial asset to collect the
contractual cash flows.

- Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.

- A financial asset that meets the following two conditions is measured at fair value through other
comprehensive income unless the asset is designated at fair value through profit or loss under the fair value
option:

- Business model test: the financial asset is held within a business model whose objective is achieved by both
collecting cash flows and selling financial assets.

Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.

- All other financial assets are measured at fair value through profit or loss."

3.27 Trade Receivables and Loans

Trade receivables that do not contain a significant financing component are measured at transaction price as
per Ind AS 115.

Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any
expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected
life of financial instrument."

3.28 Debt Instruments

Debt instruments are initially measured at amortized cost, fair value through other comprehensive income
('FVOCI') or fair value through profit or loss ('FVTPL') till derecognition on the basis of (i) the entity's business
model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

Measured at amortized cost: Financial assets that are held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are
subsequently measured at amortized cost using the effective interest rate ('EIR') method less impairment, if any.
The amortization of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and
Loss.

Measured at fair value through other comprehensive income: Financial assets that are held within a business
model whose objective is achieved by both, selling financial assets, and collecting contractual cash flows that
are solely payments of principal and interest, are subsequently measured at fair value through other
comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest
income is measured using the EIR method and impairment losses, if any, are recognized in the Statement of
Profit and Loss. On derecognition, cumulative gain or loss previously recognized in OCI is reclassified from the
equity to 'other income' in the Statement of Profit and Loss.

Measured at fair value through profit or loss: A financial asset not classified as either amortized cost or FVOCI,
is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including
interest income and dividend income if any, recognized as 'other income' in the Statement of Profit and Loss."

3.29 Investments in Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at fair value, the
Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.

The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity
instrument are recognized as other income in the Statement of Profit and Loss unless the Company has elected
to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured
at FVOCI are recognized in OCI. Amounts recognized in OCI are not subsequently reclassified to the Statement
of Profit and Loss. Dividend income on the investments in equity instruments are recognized as 'other income'
in the Statement of Profit and Loss."

3.30' Derivatives Financial Instruments

The Company uses derivative financial instruments to hedge its foreign currency and commodity risks.
Derivatives are measured at fair value. The treatment of changes in the value of derivative depends on their use
as explained below:

a) Cash Flow Hedges

Derivatives are held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives
are classified as being part of cash flow hedge relationships. For an effective hedge, gains, and losses from
changes in the fair value of derivatives are recognized in other comprehensive income. Any ineffective elements
of the hedge are recognized in the statement of profit and loss.

If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is subsequently
included within the carrying value of that asset. For other cash flow hedges, amounts accumulated in other
comprehensive income are taken to the statement of profit and loss at the same time as the related cash flow.

When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until
the related cash flow occurs. When the cash flow takes place, the cumulative gain or loss is taken to the
statement of profit and loss. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss
is taken to the statement of profit and loss immediately."

b) Derivatives for which hedge accounting is not applied.

Derivative financial instruments for which hedge accounting is not applied are initially recognized at fair value
on the date on which a derivative contract is entered and are subsequently measured at FVTPL.

c) Offsetting Financial Instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet, if there
is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them
on a net basis or to realize the assets and settle the liabilities simultaneously.

d) Derecognition

Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange
for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected
on behalf of third parties (for example taxes and duties collected on behalf of the government).

Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when
it becomes unconditional.

e) Impairment of Financial Assets

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than
financials assets in FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected
credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial
asset has not increased significantly since its initial recognition. The expected credit losses are measured as
lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial
recognition. The Company's trade receivables do not contain a significant financing component and the loss
allowance on trade receivables is measured at an amount equal to lifetime expected losses i.e., expected cash
shortfall.

The impairment losses and reversals are recognized in the Statement of Profit and Loss."

3.31 Financial Liabilities

a) Initial recognition and measurement

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are
classified as fair value through profit and loss. In the case of trade payables, they are initially recognized at fair
value and subsequently, these liabilities are held at amortized cost, using the effective interest method.

b) Subsequent Measurement

Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities
carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in
the Statement of Profit and Loss.

c) Derrecognition

Financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or
expires.

3.32 Foreign Currency Transactions

• The financial statements are presented in Indian Rupees ('INR'), which is also the Company's functional
currency. All amounts have been rounded off to the nearest rupee.

• Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

• Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of
monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences
which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly
attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets.

3.33 Segment Reporting

An Operating Segment is the level at which discrete financial information is available. Business segments are
identified considering:

a) the nature of products and services

b) the differing risks and returns

c) the internal organization and management structure, and

d) the internal financial reporting systems.

Revenue and expenses directly attributable to segments are reported under each reportable segment.
Exceptional items and other expenses which are not attributable or allocable to segments are disclosed
separately. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as un-allocable assets and liabilities."

3.34 Business Combination

Business combinations are accounted for using the acquisition accounting method as at the date of the
acquisition, which is the date at which control is transferred to the Company. The consideration transferred in
the acquisition and the identifiable assets acquired and liabilities assumed are recognized at fair values on their
acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interests, and any previous interest held, over the
net identifiable assets acquired and liabilities assumed. The Company recognizes any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's
proportionate share of the acquired entity's net identifiable assets. Consideration transferred does not include
amounts related to settlement of pre-existing relationships. Such amounts are recognized in the Statement of
Profit and Loss.

Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity
securities. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent
changes in the fair value of contingent consideration are recognized in the Statement of Profit and Loss."

For & on Behalf of For and on behalf of Board of Directors,

P L Mittal & Co. A B COTSPIN INDIA LIMITED (CIN: L17111PB1997PLC020118)

Chartered Accountants

FRN: 002697N Deepak Garg Manohar Lal

Managing Director 00843929 Whole Time Director 02406686

Sourabh Goyal Rajinder Prashad Garg Kannu Sharma

Partner 529363 Chief Financial Officer ABXPG1267D Company Secretary A64063

UDIN: 25529363BMULEN1732

Place: Bathinda Place: Bathinda

Date: (26-05-2025) Date: (26-05-2025)