1.15 Provisions, Contingent Liabilities and ContingentAssets
Provisions are recognised when the Company has a presentobligation (legal or constructive) as a result of a past event,it is probable that an outflow of resources embodyingeconomic benefits will be required to settle the obligationand a reliable estimate can be made of the amount of theobligation. When the Company expects some or all of aprovision to be reimbursed, for example, under an insurancecontract, the reimbursement is recognised as a separateasset, but only when the reimbursement is virtually certain.The expense relating to a provision is presented in thestatement of profit and loss net of any reimbursement.
If the effect of the time value of money is material,provisions are discounted using a current pre-tax rate thatreflects, when appropriate, the risks specific to the liability.When discounting is used, the increase in the provision dueto the passage of time is recognised as a finance cost.
Contingent Liability is disclosed after careful evaluationof facts, uncertainties and possibility of reimbursement,unless the possibility of an outflow of resources embodyingeconomic benefits is remote. Contingent liabilities are notrecognised but are disclosed in notes.
Contingent assets are not recognised. However, when therealisation of income is virtually certain, then the relatedasset is no longer a contingent asset, but it is recognised asan asset.
1.16 Segment Reporting
The Chief Operational Decision Maker monitors theoperating results of its business Segments separatelyfor the purpose of making decisions about resourceallocation and performance assessment. Segmentperformance is evaluated based on profit or loss andis measured consistently with the profit or loss in thefinancial statements.
The Operating Segments have been identified on the basisof the nature of products/services.
a) Segment revenue includes sales and other incomedirectly identifiable with/allocable to the segmentincluding inter-segment revenue.
b) Expenses that are directly identifiable with/allocable tosegments are considered for determining the segmentresults. Expenses which relate to the Company as awhole and not allocable to segments are includedunder un-allocable expenditure.
c) Income which relates to the Company as a whole andnot allocable to segments is included in un-allocableincome.
d) Segment result includes margin on inter-segment saleswhich are reduced in arriving at the profit before tax ofthe Company.
e) Segment assets and liabilities include those directlyidentifiable with the respective segments. Un-allocableassets and liabilities represent the assets and liabilitiesthat relate to the Company as a whole and not allocableto any segment.
Segment revenue resulting from transactions with otherbusiness segments is accounted on the basis of transferprice agreed between the segments. Such transfer pricesare either determined to yield a desired margin or agreedon a negotiated basis and are on an arm's length basis in amanner similar to transactions with third parties.
These transfers are eliminated in consolidation.
.17 Earning Per Share
Basic earnings per equity share is computed by dividingthe net profit attributable to the equity holders of theCompany by the weighted average number of equityshares outstanding during the period. Diluted earningsper equity share is computed by dividing the net profitattributable to the equity holders of the Company by theweighted average number of equity shares consideredfor deriving basic earnings per equity share and also theweighted average number of equity shares that could havebeen issued upon conversion of all dilutive potential equityshares. The dilutive potential equity shares are adjusted forthe proceeds receivable had the equity shares been actuallyissued at fair value (i.e. the average market value of theoutstanding equity shares). Dilutive potential equity sharesare deemed converted as of the beginning of the period,
unless issued at a later date. Dilutive potential equity sharesare determined independently for each period presented.The number of equity shares and potentially dilutive equityshares are adjusted retrospectively for all periods presentedfor any share splits and bonus shares issues including forchanges effected prior to the approval of the financialstatements by the Board of Directors.
1.18 Statement of Cash Flow
Cash flows are reported using the indirect method,whereby profit for the period is adjusted for the effects oftransactions of a non-cash nature, any deferrals or accrualsof past or future operating cash receipts or payments anditem of income or expenses associated with investingor financing cash flows. The cash flows from operating,investing and financing activities of the Company aresegregated.
1.19 Borrowing Costs
Borrowing costs directly attributable to the acquisition,construction or production of an asset that necessarilytakes a substantial period of time to get ready for itsintended use or sale are capitalised as part of the cost of theasset. All other borrowing costs are expensed in the periodin which they occur. Borrowing costs consist of interest andother costs that an entity incurs in connection with theborrowing of funds. Borrowing cost also includes exchangedifferences to the extent regarded as an adjustment to theborrowing costs.
1.20 Fair Value Measurement
The Company measures financial instruments, such as,derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell anasset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date. Thefair value measurement is based on the presumption thatthe transaction to sell the asset or transfer the liability takesplace either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the mostadvantageous market for the asset or liability andthe Company has access to the principal or the mostadvantageous market.
The fair value of an asset or a liability is measured usingthe assumptions that market participants would usewhen pricing the asset or liability, assuming that marketparticipants act in their economic best interest.
A fair value measurement of a non-financial asset takes intoaccount a market participant's ability to generate economicbenefits by using the asset in its highest and best use or byselling it to another market participant that would use theasset in its highest and best use.
The Company uses valuation techniques that areappropriate in the circumstances and for which sufficientdata are available to measure fair value, maximising the useof relevant observable inputs and minimising the use ofunobservable inputs.
All assets and liabilities for which fair value is measuredor disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, basedon the lowest level input that is significant to the fair valuemeasurement as a whole:
Level 1 - Quoted (unadjusted) market prices in activemarkets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest levelinput that is significant to the fair value measurement isdirectly or indirectly observable.
Level 3 - Valuation techniques for which the lowest levelinput that is significant to the fair value measurement isunobservable.
For assets and liabilities that are recognised in thefinancial statements on a recurring basis, the Companydetermines whether transfers have occurred betweenlevels in the hierarchy by re-assessing categorisation(based on the lowest level input that is significant to thefair value measurement as a whole) at the end of eachreporting period.
For the purpose of fair value disclosures, the Company hasdetermined classes of assets and liabilities on the basisof the nature, characteristics and the risks of the asset orliability and the level of the fair value hierarchy as explainedabove. This note summarises accounting policy for fairvalue. Other fair value related disclosures are given in therelevant notes.
1.21 Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprisecash at banks and on hand, short-term deposits andother short-term highly liquid investments with anoriginal maturity of three months or less that are readilyconvertible to a known amount of cash and are subject toan insignificant risk of changes in value and are held for thepurpose of meeting short-term cash commitments.
For the purposes of the presentation of cash flow statement,cash and cash equivalents include cash on hand, in banksand demand deposits with banks, net of outstanding bankoverdrafts that are repayable on demand, book overdraftas they being considered as integral part of the Company'scash management system.
1.22 Non-Current Assets Held for Sale
The Company classifies non-current assets and disposalgroups as held for sale if their carrying amounts will berecovered principally through a sale/distribution ratherthan through continuing use and the sale is consideredhighly probable. Management is committed to the salewithin one year from the date of classification.
The Company treats sale/distribution of the asset ordisposal group to be highly probable when:
• The appropriate level of management is committed toa plan to sell the asset (or disposal group),
• An active programme to locate a buyer and completethe plan has been initiated (if applicable),
• The asset (or disposal group) is being actively marketedfor sale at a price that is reasonable in relation to itscurrent fair value.
• The sale is expected to qualify for recognition as acompleted sale within one year from the date ofclassification, and
• Actions required to complete the plan indicated that itis unlikely that significant changes to the plan will bemade or that the plan will be withdrawn.
Non-current asset held for sale/for distribution to ownersand disposal groups are measured at the lower of theircarrying amount and the fair value less costs to sell/distribute. Assets and liabilities classified as held for sale/distribution are presented separately in the balance sheet.
Property, plant and equipment and intangible assets onceclassified as held for sale/distribution to owners are neitherdepreciated nor amortized.
1.23 Investments in Subsidiaries and Associates
A subsidiary is an entity in which the Company eitherat its own or together with one or more of its subsidiarycompanies, has acquired more than one-half of its totalshare capital. The investment in subsidiaries are carried atcost less impairments. The cost comprises, price paid toacquire investment and directly attributable cost.
An associate is an entity over which the Company hassignificant influence. Significant influence is the power toparticipate in the financial and operating policy decisionsof the investee but is not control or joint control over thosepolicies. The investment in associates are carried at costless impairments. The cost comprises, price paid to acquireinvestment and directly attributable cost.
1.24 Business Combinations
Business combinations (other than those under commoncontrol) are accounted for using the acquisition methodunder Ind AS 103. The cost of an acquisition is measuredas the aggregate of the consideration transferred measuredat acquisition date fair value. Acquisition-related costsare expensed as incurred. At the acquisition date, theidentifiable assets acquired and the liabilities assumed arerecognised at their acquisition date fair values.
When the Company acquires a business, it assesses thefinancial assets and liabilities assumed for appropriateclassification and designation in accordance with thecontractual terms, economic circumstances and pertinentconditions as at the acquisition date. The considerationtransferred by the acquirer is recognized at fair value at theacquisition date.
Goodwill is initially measured at cost, being the excess ofthe aggregate of the consideration transferred over thenet identifiable assets acquired and liabilities assumed.After initial recognition, goodwill is measured at cost lessany accumulated impairment losses. Goodwill is testedfor impairment annually or more frequently if events orchanges in circumstances indicate that they might beimpaired. For the purpose of impairment testing, goodwillacquired in a business combination is, from the acquisitiondate, allocated to each of the Company's cash-generatingunits that are expected to benefit from the combination,irrespective of whether other assets or liabilities of theacquire are assigned to those units. A cash generatingunit to which goodwill has been allocated is tested forimpairment annually, or more frequently when there is anindication that the unit may be impaired. If the recoverableamount of the cash generating unit is less than its carryingamount, the impairment loss is allocated first to reduce thecarrying amount of any goodwill allocated to the unit andthen to the other assets of the unit pro rata based on thecarrying amount of each asset in the unit. Any impairmentloss for goodwill is recognized in the statement of profitor loss. An impairment loss recognized for goodwill is notreversed in subsequent periods.
The preparation of the Company's financial statementsrequires management to make judgments, estimates andassumptions that affect the reported amounts of revenues,expenses, assets and liabilities, the accompanyingdisclosures, and the disclosure of contingent liabilities.
The key assumptions concerning the future and otherkey sources of estimation uncertainty at the reportingdate, that have a significant risk of causing a materialadjustment to carrying amounts of assets and liabilitieswithin the next financial years are described below.The Company based its assumptions and estimates orparameters available when the financial statements wereprepared. Existing circumstances and assumptions aboutfuture developments, however, may change due to marketchanges or circumstances arising that are beyond thecontrol of the Company. Such changes are reflected in theassumptions when they occur.
Internal technical or user team assesses the remaininguseful life of the Property, Plant and Equipment andIntangible assets. Management believes that assigneduseful lives are reasonable.
In assessing the applicability to arrangement enteredinto by the Company, the management has exercisedthe judgment to evaluate the right to use the asset orassets on substance of the transaction including legallyenforced arrangement and other significant terms ofthe contract to conclude whether the arrangementmeets the criteria under the Ind AS 116.
In assessing value in use, the estimated future cash flowsare discounted to their present value using a pre-taxdiscount rate that reflects current market assessmentsof the time value of money and the risks specific tothe asset.
In determining fair value less costs of disposal, recentmarket transactions are taken into account. If no suchtransactions can be identified, an appropriate valuationmodel is used. These calculations are corroboratedby valuation multiples, quoted share prices forpublicly traded companies or other available fairvalue indicators.
The impairment provisions for financial assets are basedon assumptions about risk of default and expectedloss rates. The Company uses judgement in makingassumption and selecting the inputs to the impairmentcalculation, based on Company's past history, existingmarket conditions as well as forward estimate at theend of each reporting period.
(e) Investment in Subsidiary/Associates
A subsidiary is an entity in which the Company eitherat its own or together with one or more of its subsidiarycompanies, has acquired more than one half of its totalshare capital.
As per Ind AS 28, an entity is considered as an associatewhen the investing Company has significant influenceover the entity. The existence of significant influenceby an investor is determined based on factors such as,representation on the board of directors or equivalentgoverning body of investee, participation in policy¬making processes, including participation in decisionsabout dividends or other distributions, materialtransactions between the entity and it's investee,interchange of managerial personnel or provision ofessential technical information.
(f) Assets Held for sale
Management's Judgment is required for identifyingthe assets which are classified as held for sale if theircarrying amount will be recovered principally througha sale transaction rather than through continuing use.This condition is regarded as met only when the assetis available for immediate sale in its present conditionsubject only to terms that are usual and customary forsales of such asset and its sale is highly probable whichcould lead to significant judgment. Management iscommitted to the sale, which should be expected toqualify for recognition as a completed sale within oneyear from the date of classification.
Management's judgment is required for the calculationof provision for income taxes and deferred tax assetsand liabilities. The Company reviews at each balancesheet date the carrying amount of deferred tax assets.The factors used in estimates may differ from actualoutcome which could lead to significant adjustment tothe amounts reported in the financial statements.
Management's judgment is required for estimatingthe possible outflow of resources, if any, in respect ofcontingencies/claim/litigations against the Companyas it is not possible to predict the outcome of pendingmatters with accuracy.
The cost of the defined benefit plans and other post¬employment benefits and the present value of suchobligations are determined using actuarial valuations.An actuarial valuation involves making variousassumptions that may differ from actual developmentsin future. These Includes the determination of thediscount rate, future salary increases, mortality ratesand attrition rate. Due to the complexities involvedin the valuation and its long-term nature, a definedbenefit obligation is highly sensitive to changes inthese assumptions. All assumptions are reviewed ateach reporting date.
(j) Insurance Claims
Insurance claims are recognized when the Companyhas reasonable certainty of recovery. Subsequently anychange in recoverability is provided for.
Recent Accounting Pronouncements
Ministry of Corporate Affairs ("MCA") notifies newstandards or amendments to the existing standardsunder the Companies (Indian Accounting Standards)Rules, as issued from time to time. During the yearended 31 March 2026, MCA has notified the Companies(Indian Accounting Standards) Amendment Rules, 2025applicable to the Company w.e.f. 151 April, 2025.
The Company has reviewed the amendment and basedon its evaluation has determined that it does not haveany impact in its financial statements.
The amendments relating to classification of liabilities ascurrent or non-current and non-current liabilities withcovenants. The Company has reviewed the amendmentand based on its evaluation has determined that itdoes not have any significant impact in its financialstatements.
Require detailed disclosure for Supplier FinanceArrangements and effect of such arrangements on cashflows. The Company has made the disclosure in thefinancial statements.
Ind AS 12 - Income Taxes related to mandatorydisclosure of impact of OECD Pillar Two ModelRules and temporary exemption from deferred taxrecognition on the same:
The Company has reviewed the amendment related toapplication of Pillar Two rules and determined that thesame does not have any material financial impact onthe Company.
Ministry of Corporate Affairs ("MCA") notifies newstandards or amendments to the existing standardsunder Companies (Indian Accounting Standards)Rules as issued from time to time. MCA has notifiedamendments to Ind AS 1 - Presentation of FinancialStatements with effect from 1 April 2026.
Note on Assets Classified as Held for Sale
Non-current assets or disposal groups comprising of assets are classified as 'held for sale' when all the following criteria are met:(i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii) the assets are beingactively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.Subsequently, such non-current assets and disposal groups classified as 'held for sale' are measured at the lower of its carryingvalue and fair value less costs to sell. Non-current assets held for sale are not depreciated
The Company participates in defined contribution and benefit schemes, the assets of which are held (where funded) in separatelyadministered funds. For defined contribution schemes the amount charged to the statements of profit or loss is the total ofcontributions payable during the year-
Employees Provident Fund
In accordance with the Employees Provident Fund & Miscellaneous Provisions Act, 1952, employees are entitled to receivebenefits under the Provident Fund. Both the employees and the employer make monthly contributions to the plan at apredetermined rate (12% for FY 2025-26) of an employee's basic salary. All employees have an option to make additionalvoluntary contributions. These contributions are made to the fund administered and managed by the Employees ProvidentFund Organisation (EPFO) or to independently managed and approved funds. The Company has no further obligationsunder the fund managed by the EPFO beyond its monthly contributions which are charged to the statement of profit andloss in the period they are incurred. The benefits are paid to employees on their retirement or resignation from the Company.Provident fund set up by the employer, which requires interest shortfall to be met by the employer, needs to be treated as definedbenefit plan. The Company set up Provident Fund does not have existing deficit of interest shortfall.
Superannuation
Superannuation, another pension scheme applicable in India, is applicable only to senior executives. RSWM Limited holds a policywith Life Insurance Corporation of India ("LIC"), to which it contributes a fixed amount relating to superannuation and the pensionannuity is met by LIC as required, taking into consideration the contributions made. The Company has no further obligations underthe scheme beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.
Gratuity Plan
In accordance with the provisions of Payment of Gratuity Act 1972, for its eligible employees, the Company contributes to a definedbenefit plan (the "Gratuity Plan") . The Gratuity Plan provides a lump sum payment to vested employees at retirement, disabilityor termination of employment being an amount based on the respective employee's last drawn salary and the number of years ofemployment with the Company.
Based on actuarial valuations conducted as at year end, a provision is recognised in full for the benefit obligation over and abovethe funds held in the Gratuity Plan.
The Company has recognised an expense of H2,850.75 Lakh (Previous Year H2,859.61 Lakh) towards the defined contribution plan.
The expected contribution for Defined Benefit Plan for the next financial year will be H 1,482.28 Lakh.
The estimates of future salary increase considered in actuarial valuation, have been made taking into account inflation,seniority promotion and other relevant factors, such as supply and demand in the employment market. The above informationis certified by the actuary. The actual return on plan assets for the year and estimate of contribution for the next year as peractuarial valuation is as under: -
XII Description of Risk Exposures:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such the Company is exposedto various risks as follows -
a) Salary Increases- Actual salary increases will increase the Plan's liability. Increase in salary increase rate assumption in futurevaluations will also increase the liability.
b) Investment Risk - If Plan is funded then assets liabilities mismatch and actual investment return on assets lower than thediscount rate assumed at the last valuation date can impact the liability.
37 B The Company has exposure in LNJ Power Ventures Limited (LNJPV) amounting to H 26 Lakh in Equity Share Capital andH 832 Lakh in 14.00% Compulsory Convertible Debentures (CCDs). The interest on the above said CCDs is due from LNJPV sincefinancial year 2016-17 H2,905.32 Lakh remain unpaid on March 31,2026. Also H3,261.05 Lakh is payable against supply of powerby LNJPV under a long-term Power Purchase Agreement (PPA) supported by Bank Guarantee of H1,000 Lakh to LNJPV to securesuch PPA.
During the year, the Arbitral Tribunal vide its order dated 31st March, 2026 upheld LNJPV's claim for the principal amount underthe PPA, which is already recognised as payable in the Company's balance sheet, and rejected the Company's counterclaimfor set-off. The interest/coupon on CCDs shall become payable in future upon fulfilment of the stipulated conditions.The company is in the process of challenging the Award and filing an appeal to the Hon'ble High Court of Delhi and seeking astay order. The Company firmly believes that it has credible case in its favour and also been advised by an expert, accordinglythe amount shown is good and fully recoverable and no impairment is considered necessary in the financial statements.
38. Segment Information
For management purposes, the Company is organised into business units based on its products and services and has followingreportable segments:
• Yarn
• Fabric
No operating segments have been aggregated to form the above reportable operating segments.
Identification of Segments
The Board of Directors of the Company has been identified as Chief Operating Decision Maker who monitors the operating results of itsbusiness segments separately for the purpose of making decisions about resource allocation and performance assessment. Segmentperformance is evaluated based on profit or loss and is measured consistently with the profit or loss in the financial statements.
Accounting policy in respect of segments is in conformity with the accounting policy of the company as a whole.
Inter-segment Transfer
Segment revenue resulting from transactions with other business segments is accounted for on the basis of transfer price agreedbetween the segments. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactionswith third parties. These transfers are eliminated in consolidation.
Segment Revenue and Results
The revenue and expenditure in relation to the respective segments have been identified and allocated to the extent possible.Other revenue and expenditure non allocable to specific segments are being disclosed separately as unallocated and adjusteddirectly against the total income of the Company.
Segment Assets and Liabilities
Segment assets include all operating assets used by the operating segment and mainly consisting of property, plant & equipment,trade receivables, cash and cash equivalents and inventory etc. Segment liabilities primarily include trade payables and otherliabilities. Common assets and liabilities which can not be allocated to specific segments are shown as a part of unallocableassets/liabilities.
Terms & Conditions of transactions with related Parties:
The sales and purchases, services rendered to/from related parties and interest are made on terms equivalent to those that prevailin arms length transaction. Outstanding balances at the year end are unsecured and settlement occurs in cash. For the year endedMarch 31,2026 and for the year ended March 31,2025, the Company has not recorded any impairment of receivables relating toamount owed by related parties.
This assessment is undertaken through out the financial year through examining the financial position of the related parties andthe market in which the related parties operate.
Valuation Technique used to determine Fair Value
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevantdata available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The followingmethods and assumptions were used to estimate the fair values:
1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities measured atamortized cost is approximate to their carrying amounts largely due to the short-term maturities of these instruments. The fairvalue of other non-current financial assets and liabilities (security deposit taken/given and advance to employees) carried atamortized cost is approximately equal to fair value. Hence carrying value and fair value is taken same.
2) Long-term variable-rate borrowings measured at amortized cost are evaluated by the Company based on parameters such asinterest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowingsapproximates their carrying values. Risk of other factors for the company is considered to be insignificant in valuation.
3) The fair values of the forward contract is determined using the forward exchange rate at the balance sheet date based onquotes from banks and financial institutions. Management has evaluated the credit and non-performance risks associated withits derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.
4) The fair values of the Quoted Equity shares have been done on quoted price of stock exchange as on reporting date.
5) Investment in the Unquoted Debenture have been valued considering the market coupon rate of similar financial instruments.c Financial Risk Management
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk managementframework. The Board of directors has established the risk management committee, which is responsible for developing andmonitoring the Company's risk management policies. The Committee reports regularly to the board of directors on its activities.
The Company's risk management policies are established to identify and analyse the risk faced by the Company, to set appropriaterisks limits and controls and to monitor risks and adherence to limits. Risk Management policies and systems are reviewed regularlyto reflect changes in the market condition and Company's Activities.
The audit committee oversees how management monitors compliances with the Company's risk management policies andprocedures and review the adequacy of the risk management framework in relation to risks faced by the Company. The auditcommittee is assisted in its oversight role by internal audit. Internal audit undertakes review of risks management controls andprocedures, the results of which are reported to the audit committee.
Financial risk factors
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk.i. Market Risk:
Market risk is the risk that changes in the market prices such as foreign currency risk, interest risk, equity price and commodityprices. The market risk will affect the company's income or value of its holding of financial instruments. The objective of the marketrisk management is to manage and control market risk exposure within acceptable parameters, while optimizing the returns.
i. a Foreign Currency Risk
The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions primarilywith respect to USD and EURO. Foreign currency risk arises from future commercial transactions and recognised assets and liabilitiesdenominated in a currency that is not the Company's functional currency. The Company evaluates exchange rate exposure arisingfrom foreign currency transactions and follows established risk management policies, including the use of derivatives like foreignexchange forward contracts to hedge exposure to foreign currency risk.
The sensitivity analysis is computed by comparing weighted average exchange rate for the period ended March 31, 2026 andMarch 31,2025
(i) b. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will lead to changes in interest income and expense for the Company.Based on market intelligence, study of research analysis reports, company reviews its short/long position to avail working capitalloans and minimise interest rate risk.
In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest risk,the Company performs comprehensive corporate interest risk management by balancing the proportion of fix rate and floatingrate financial instruments.
Sensitivity Analysis
Fair Value Sensitivity Analysis for Fixed Rate Instruments
The Company does not account for any fixed rate financial assets or financial liabilities at fair value through Profit or Loss, thereforechange in interest rate at the reporting date would not affect profit or loss.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A Increase of 31 basis points (previous year 35 basis points) in interest rate at the reporting date would have increased, (decreased)Profit or Loss by the amount shown below. This analysis assumes that all other variables, remain constant.
(i) c. Price Risk
- Exposure
The Company is exposed to equity securities price risk arises from investments held by the Company and classified in the balancesheet at fair value through Other Comprehensive Income. Material investments are managed on individual basis and all buy andsell decisions are approved by the management. The primary goal of the investment strategy is to maximize investment returns.
Increase/decrease of 10% in the equity prices would have impact of H892.06 Lakh (H795.59 Lakh in previous year) on the OtherComprehensive Income and Equity. These changes would not have an effect on Profit or Loss.
(ii) Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed tocredit risk from its operating activities (primarily trade receivables) and from its financing activities including deposit with banksand financial institutions, loans, investment in debt securities, forward exchange contract and other financial instruments.
The Company considers the probability of default upon initial recognition of assets and when there has been significant increase incredit risk and on an on-going basis throughout each reporting date to assess whether there is an significant increase in credit risk,the Company compares the risk of default occurring on assets as at reporting date with the risk of default as at the date of initialrecognition by considering reasonable forward looking estimations.
Financial assets are written off when there is no reasonable expectation of recovery. Whereas the loans and receivables werewritten off and subsequently recoveries are made, these are recognised as an income in the financial statements.
- Trade Receivables
Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always beenmanaged by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness ofcustomers to which the Company grants credit terms in the normal course of business. The Company evaluates the concentrationof risk with respects to trade receivables as low, as its customers are located in several jurisdictions and industries and operatein largely independent markets. A default on a financial assets is when a counter party fails to make the payment within 365days, when they fall due. This definition of default is determined by considering the business environment in which the entityoperates and other macro economic factors. The company uses expected credit loss model to assess the impairment loss or gain.The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrixtakes into account available external and internal credit risk factors such as financial condition, ageing of outstanding and theCompany's historical experience for customers.
Financial assets to which loss allowances measured using 12 months expected credit loss.
Other than trade receivables, the expected credit loss on the other financial assets is measured at an amount equal to the 12 monthECL, unless there is a significant risk of credit loss. However, based upon these parameters, there is no credit loss on these otherfinancial assets has been identified nor any significant credit risk has been observed since their initial recognition.
Cash and Cash Equivalents, Deposit with Banks
Credit risk on cash and cash equivalents and deposit with banks is limited as the Company generally invests in deposits with banksand financial institutions with high credit ratings assigned by international and domestic credit rating agencies.
Derivatives (Forward Contracts)
Derivatives are entered with banks, counter parties which have low credit risk, based on external credit ratings of counter parties.
For other financial assets the company monitors ratings, credit spreads and financial strengths of its counterparties. Based onits ongoing assessment of the counter party's risk, the Company adjusts its exposures to various counter parties. Based on theassessment there is no impairment in other financial assets.
(iii) Liquidity risk
The Company's objective is at all times to maintain optimum levels of liquidity to meet its cash and collateral requirements. TheCompany's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processesand policies related to such risk are overseen by senior management. The Company relies on a mix of borrowings, capital infusionand excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its shortto medium term expansion needs. The Company manages liquidity risk by maintaining adequate reserves, banking facilities andreserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles offinancial assets and liabilities. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cashto meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times sothat the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
42 B: Financial Instruments
(iv) Derivative financial instruments
(iv) a. Disclosure of effects of hedge accounting on financial position:
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changesin exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of INR cash flows of highlyprobable forecast transaction. The Company's risk management policy is to hedge around 50% to 90% of the net exposure withforward exchange contract, having a maturity upto 12 months.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectivenessassessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whetherthe hedging instrument is expected to offset changes in cash flows of hedged items.
It is anticipated that sales will take place during the first six months of next financial year, at which time the amount shown in cashflow hedge reserve will be reclassified to statement of profit & loss account.
The following table demonstrates the sensitivity in the foreign exchange rates (USD, Euro and GBP) to the Indian Rupees withall other variables held constant. The impact on the other component of Equity arises from foreign forward exchange contractdesignated as cash flow hedge reserve is given below:
The sensitivity analysis is computed by comparing average exchange rate for the period ended March 31,2026 and March 31,2025.
For the purpose of the Company's capital management, capital includes issued equity share capital, share premium and all otherequity reserves attributable to the equity shareholders of the parent. The primary objective of the Company's capital managementis to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and therequirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend paymentto shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which isnet debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings,trade and other payables, less cash and cash equivalents, excluding discontinued operations.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meetsfinancial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches inmeeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches inthe financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2026 andMarch 31,2025.
44 A : Impairment Loss on Property, Plant & Equipment and Intangible Assets
In terms of Indian Accounting Standard 36 - Impairment of Assets, as on reporting date, the Company evaluated each CGU'sIntangible Assets and PPE Based on such evaluation, which is also supported by external information, more particularly the marketvalue and economic performance of the assets, no indication of impairment has been determined.
44 B : Other Information in terms of the amendment in schedule lll of the companies act vide notification dated24th March 2021
a) The Company does not have any Benami Property, and no proceeding has been initiated or pending against the Company forholding any Benami Property.
b) The Company does not have any transactions with companies which are struck off.
c) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond thestatutory period.
d) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
e) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities(Intermediaries) with the understanding that the Intermediary shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of thecompany (ultimate beneficiaries) or
(ii) Provide any Guarantee, Security, or the like to or on behalf of the Ultimate Beneficiaries.
f) The Company have not received any fund from any Person(s) or Entity(ies), including Foreign Entities (Funding Party) with theunderstanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of thefunding party (ultimate beneficiaries) or
(b) Provide any Guarantee, Security, or the like on behalf of the ultimate beneficiaries.
g) The Group has been sanctioned working capital limit in excess of H 5 crore, in aggregate, at points of time during the year,from bank on the basis of security of current assets. The quarterly returns/ statements filed by the Company with the bank, aregenerally in agreement with the books of accounts of the Company of the respective quarters and differences, if any are notmaterial.
h) The Group has no such transaction which is not recorded in the Books of Accounts that has been surrendered or disclosed asincome during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevantprovisions of the Income Tax Act, 1961).
i) The Company have not been declared wilful defaulter by any Banks or any other Financial Institution at any time during thefinancial year.
j) The Company has utilized the borrowings from banks and financial institutions for the specific purpose for which it was takenduring the financial year.
48 Pursuant to the Notification issued by the Ministry of Labour & Employment (MoLE), Government of India, multiple existingLabour legislations have been consolidated into a unified framework comprising four Labour Codes, collectively referred to asthe 'New Labour Codes' which became effective from 21st November 2025. Based on the information available, the Companyhas re-assessed its Employee Benefits Obligations arising from implementation of the 'New Labour Codes' at the currentestimate, based on its best judgement is H1,056.69 Lakh and recognized the same as 'Exceptional Item' during the year ended31st March 2026. The Company continues to monitor the Finalization of the Central/State Rules & further Clarifications from theGovernment and will account for any additional impact as required.
49 (a) Based on our examination which included test checks and representations received from the management, the Companyhas used accounting software for maintaining its books of account, which have a feature of recording audit trail (edit log)facility and has been operated for all relevant financial transactions recorded in the software except audit trail was enabled atdatabase level w.e.f 23rd April 2025. For the periods wherever audit trail (edit log) facility was enabled and operated throughoutthe year for the respective accounting software, we did not come across any instance of the audit trail feature being tamperedwith and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
49 (b) (i) Subsequent to the balance sheet date, the Board of Directors of the Company, at its meeting held on April 9, 2026, hasapproved, subject to the approval of shareholders and other requisite statutory and regulatory approvals, the issuance of upto 24,70,000 convertible warrants at an issue price of H146 per share (including a premium of H136) ,determined in accordancewith the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended to LNJ TextilesAdvisory LLP (Promoter Group) on a preferential basis. An amount equivalent to 25% of the issue price shall be payable at thetime of allotment of warrants, and the balance 75% shall be payable at the time of conversion of warrants into equity shares.Each warrant is convertible into one equity share of face value H10 each. The conversion option may be exercised within aperiod of 18 months from the date of allotment, in one or more tranches.
(ii) The Board of Directors, in its meeting held on May 6, 2026, has considered and approved (subject to approvals of theshareholders and other regulatory authorities) the formulation and adoption of "RSWM Limited Employee Stock Option Plan2026" ('ESOP Plan') for grant of employee stock options convertible into up to 9,70,000 equity shares of H10 each (face value) toeligible employees of the Company and its subsidiaries. The ESOP Plan shall be implemented in accordance with the provisionsof the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended.
49 (c) During the year, the Company decided not to proceed with setting up a Recycled PET chips and Recycled Filament Yarnproject in the State of Jammu & Kashmir due to commercial non-viability and surrendered the leasehold land. Based onmanagement's assessment, legal advice and ongoing correspondence with J&K State Industrial Development CorporationLimited, the balance refundable amount of H 477 lakhs has been considered fully recoverable and accordingly, no impairmenthas been recognised.
50 Previous year figures have been regrouped/ rearranged, wherever considered necessary to confirm to current year'sclassification.