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NOTES TO ACCOUNTS

RSWM Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 1039.20 Cr. P/BV 0.75 Book Value (₹) 293.13
52 Week High/Low (₹) 238/120 FV/ML 10/1 P/E(X) 19.98
Bookclosure 13/09/2024 EPS (₹) 11.04 Div Yield (%) 0.00
Year End :2026-03 

1.15 Provisions, Contingent Liabilities and Contingent
Assets

Provisions are recognised 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. When the Company expects some or all of a
provision to be reimbursed, for example, under an insurance
contract, 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.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost.

Contingent Liability is disclosed after careful evaluation
of facts, uncertainties and possibility of reimbursement,
unless the possibility of an outflow of resources embodying
economic benefits is remote. Contingent liabilities are not
recognised but are disclosed in notes.

Contingent assets are not recognised. However, when the
realisation of income is virtually certain, then the related
asset is no longer a contingent asset, but it is recognised as
an asset.

1.16 Segment Reporting

The Chief Operational Decision Maker monitors the
operating results of its business Segments separately
for the purpose of making decisions about resource
allocation and performance assessment. Segment
performance is evaluated based on profit or loss and
is measured consistently with the profit or loss in the
financial statements.

The Operating Segments have been identified on the basis
of the nature of products/services.

a) Segment revenue includes sales and other income
directly identifiable with/allocable to the segment
including inter-segment revenue.

b) Expenses that are directly identifiable with/allocable to
segments are considered for determining the segment
results. Expenses which relate to the Company as a
whole and not allocable to segments are included
under un-allocable expenditure.

c) Income which relates to the Company as a whole and
not allocable to segments is included in un-allocable
income.

d) Segment result includes margin on inter-segment sales
which are reduced in arriving at the profit before tax of
the Company.

e) Segment assets and liabilities include those directly
identifiable with the respective segments. Un-allocable
assets and liabilities represent the assets and liabilities
that relate to the Company as a whole and not allocable
to any segment.

Inter-Segment transfer pricing

Segment revenue resulting from transactions with other
business segments is accounted on the basis of transfer
price agreed between the segments. Such transfer prices
are either determined to yield a desired margin or agreed
on a negotiated basis and are on an arm's length basis in a
manner similar to transactions with third parties.

These transfers are eliminated in consolidation.

.17 Earning Per Share

Basic earnings per equity share is computed by dividing
the net profit attributable to the equity holders of the
Company by the weighted average number of equity
shares outstanding during the period. Diluted earnings
per equity share is computed by dividing the net profit
attributable to the equity holders of the Company by the
weighted average number of equity shares considered
for deriving basic earnings per equity share and also the
weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity
shares. The dilutive potential equity shares are adjusted for
the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the
outstanding equity shares). Dilutive potential equity shares
are deemed converted as of the beginning of the period,

unless issued at a later date. Dilutive potential equity shares
are determined independently for each period presented.
The number of equity shares and potentially dilutive equity
shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues including for
changes effected prior to the approval of the financial
statements 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 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 from operating,
investing and financing activities of the Company are
segregated.

1.19 Borrowing Costs

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the
borrowing of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment to the
borrowing 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 an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most
advantageous market for the asset or liability and
the Company has access to the principal or the most
advantageous market.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use
of relevant observable inputs and minimising the use of
unobservable inputs.

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

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

Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.

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

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis
of the nature, characteristics and the risks of the asset or
liability and the level of the fair value hierarchy as explained
above. This note summarises accounting policy for fair
value. Other fair value related disclosures are given in the
relevant notes.

1.21 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise
cash at banks and on hand, short-term deposits and
other short-term highly liquid investments with an
original maturity of three months or less that are readily
convertible to a known amount of cash and are subject to
an insignificant risk of changes in value and are held for the
purpose 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 banks
and demand deposits with banks, net of outstanding bank
overdrafts that are repayable on demand, book overdraft
as they being considered as integral part of the Company's
cash management system.

1.22 Non-Current Assets Held for Sale

The Company classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale/distribution rather
than through continuing use and the sale is considered
highly probable. Management is committed to the sale
within one year from the date of classification.

The Company treats sale/distribution of the asset or
disposal group to be highly probable when:

• The appropriate level of management is committed to
a plan to sell the asset (or disposal group),

• An active programme to locate a buyer and complete
the plan has been initiated (if applicable),

• The asset (or disposal group) is being actively marketed
for sale at a price that is reasonable in relation to its
current fair value.

• The sale is expected to qualify for recognition as a
completed sale within one year from the date of
classification, and

• Actions required to complete the plan indicated that it
is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn.

Non-current asset held for sale/for distribution to owners
and disposal groups are measured at the lower of their
carrying 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 once
classified as held for sale/distribution to owners are neither
depreciated nor amortized.

1.23 Investments in Subsidiaries and Associates

A subsidiary is an entity in which the Company either
at its own or together with one or more of its subsidiary
companies, has acquired more than one-half of its total
share capital. The investment in subsidiaries are carried at
cost less impairments. The cost comprises, price paid to
acquire investment and directly attributable cost.

An associate is an entity over which the Company has
significant influence. Significant influence is the power to
participate in the financial and operating policy decisions
of the investee but is not control or joint control over those
policies. The investment in associates are carried at cost
less impairments. The cost comprises, price paid to acquire
investment and directly attributable cost.

1.24 Business Combinations

Business combinations (other than those under common
control) are accounted for using the acquisition method
under Ind AS 103. The cost of an acquisition is measured
as the aggregate of the consideration transferred measured
at acquisition date fair value. Acquisition-related costs
are expensed as incurred. At the acquisition date, the
identifiable assets acquired and the liabilities assumed are
recognised at their acquisition date fair values.

When the Company acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with the
contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. The consideration
transferred by the acquirer is recognized at fair value at the
acquisition date.

Goodwill is initially measured at cost, being the excess of
the aggregate of the consideration transferred over the
net identifiable assets acquired and liabilities assumed.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is tested
for impairment annually or more frequently if events or
changes in circumstances indicate that they might be
impaired. For the purpose of impairment testing, goodwill
acquired in a business combination is, from the acquisition
date, allocated to each of the Company's cash-generating
units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the
acquire are assigned to those units. A cash generating
unit to which goodwill has been allocated is tested for
impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable
amount of the cash generating unit is less than its carrying
amount, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and
then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment
loss for goodwill is recognized in the statement of profit
or loss. An impairment loss recognized for goodwill is not
reversed in subsequent periods.

2 Use of Critical Judgments, Estimates and Assumptions

The preparation of the Company's financial statements
requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, the accompanying
disclosures, and the disclosure of contingent liabilities.

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to carrying amounts of assets and liabilities
within the next financial years are described below.
The Company based its assumptions and estimates or
parameters available when the financial statements were
prepared. Existing circumstances and assumptions about
future developments, however, may change due to market
changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the
assumptions when they occur.

(a) Property, Plant and Equipment and Intangible
assets

Internal technical or user team assesses the remaining
useful life of the Property, Plant and Equipment and
Intangible assets. Management believes that assigned
useful lives are reasonable.

(b) Embedded Lease

In assessing the applicability to arrangement entered
into by the Company, the management has exercised
the judgment to evaluate the right to use the asset or
assets on substance of the transaction including legally
enforced arrangement and other significant terms of
the contract to conclude whether the arrangement
meets the criteria under the Ind AS 116.

(c) Impairment of Non-Financial Assets

In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to
the asset.

In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated
by valuation multiples, quoted share prices for
publicly traded companies or other available fair
value indicators.

(d) Impairment of Financial Assets

The impairment provisions for financial assets are based
on assumptions about risk of default and expected
loss rates. The Company uses judgement in making
assumption and selecting the inputs to the impairment
calculation, based on Company's past history, existing
market conditions as well as forward estimate at the
end of each reporting period.

(e) Investment in Subsidiary/Associates

A subsidiary is an entity in which the Company either
at its own or together with one or more of its subsidiary
companies, has acquired more than one half of its total
share capital.

As per Ind AS 28, an entity is considered as an associate
when the investing Company has significant influence
over the entity. The existence of significant influence
by an investor is determined based on factors such as,
representation on the board of directors or equivalent
governing body of investee, participation in policy¬
making processes, including participation in decisions
about dividends or other distributions, material
transactions between the entity and it's investee,
interchange of managerial personnel or provision of
essential technical information.

(f) Assets Held for sale

Management's Judgment is required for identifying
the assets which are classified as held for sale if their
carrying amount will be recovered principally through
a sale transaction rather than through continuing use.
This condition is regarded as met only when the asset
is available for immediate sale in its present condition
subject only to terms that are usual and customary for
sales of such asset and its sale is highly probable which
could lead to significant judgment. Management is
committed to the sale, which should be expected to
qualify for recognition as a completed sale within one
year from the date of classification.

(g) Income taxes

Management's judgment is required for the calculation
of provision for income taxes and deferred tax assets
and liabilities. The Company reviews at each balance
sheet date the carrying amount of deferred tax assets.
The factors used in estimates may differ from actual
outcome which could lead to significant adjustment to
the amounts reported in the financial statements.

(h) Contingencies

Management's judgment is required for estimating
the possible outflow of resources, if any, in respect of
contingencies/claim/litigations against the Company
as it is not possible to predict the outcome of pending
matters with accuracy.

(i) Defined Benefit Plans

The cost of the defined benefit plans and other post¬
employment benefits and the present value of such
obligations are determined using actuarial valuations.
An actuarial valuation involves making various
assumptions that may differ from actual developments
in future. These Includes the determination of the
discount rate, future salary increases, mortality rates
and attrition rate. Due to the complexities involved
in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed at
each reporting date.

(j) Insurance Claims

Insurance claims are recognized when the Company
has reasonable certainty of recovery. Subsequently any
change in recoverability is provided for.

Recent Accounting Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under the Companies (Indian Accounting Standards)
Rules, as issued from time to time. During the year
ended 31 March 2026, MCA has notified the Companies
(Indian Accounting Standards) Amendment Rules, 2025
applicable to the Company w.e.f. 151 April, 2025.

Ind AS 21 - The Effects of Changes in Foreign
Exchange Rates:

The Company has reviewed the amendment and based
on its evaluation has determined that it does not have
any impact in its financial statements.

Ind AS 1- Presentation of Financial Statements:

The amendments relating to classification of liabilities as
current or non-current and non-current liabilities with
covenants. The Company has reviewed the amendment
and based on its evaluation has determined that it
does not have any significant impact in its financial
statements.

Ind AS 7 - Statement of Cash Flows and Ind AS 107 -
Financial Instruments:

Require detailed disclosure for Supplier Finance
Arrangements and effect of such arrangements on cash
flows. The Company has made the disclosure in the
financial statements.

Ind AS 12 - Income Taxes related to mandatory
disclosure of impact of OECD Pillar Two Model
Rules and temporary exemption from deferred tax
recognition on the same:

The Company has reviewed the amendment related to
application of Pillar Two rules and determined that the
same does not have any material financial impact on
the Company.

Standards notified but not yet effected

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. MCA has notified
amendments to Ind AS 1 - Presentation of Financial
Statements 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 being
actively 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 carrying
value and fair value less costs to sell. Non-current assets held for sale are not depreciated

34 Employee Benefits

The Company participates in defined contribution and benefit schemes, the assets of which are held (where funded) in separately
administered funds. For defined contribution schemes the amount charged to the statements of profit or loss is the total of
contributions payable during the year-

Employees Provident Fund

In accordance with the Employees Provident Fund & Miscellaneous Provisions Act, 1952, employees are entitled to receive
benefits under the Provident Fund. Both the employees and the employer make monthly contributions to the plan at a
predetermined rate (12% for FY 2025-26) of an employee's basic salary. All employees have an option to make additional
voluntary contributions. These contributions are made to the fund administered and managed by the Employees Provident
Fund Organisation (EPFO) or to independently managed and approved funds. The Company has no further obligations
under the fund managed by the EPFO beyond its monthly contributions which are charged to the statement of profit and
loss 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 defined
benefit 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 policy
with Life Insurance Corporation of India ("LIC"), to which it contributes a fixed amount relating to superannuation and the pension
annuity is met by LIC as required, taking into consideration the contributions made. The Company has no further obligations under
the 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 defined
benefit plan (the "Gratuity Plan") . The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability
or termination of employment being an amount based on the respective employee's last drawn salary and the number of years of
employment with the Company.

Based on actuarial valuations conducted as at year end, a provision is recognised in full for the benefit obligation over and above
the funds held in the Gratuity Plan.

a) Defined Contribution Plans

The Company has recognised an expense of H2,850.75 Lakh (Previous Year H2,859.61 Lakh) towards the defined contribution plan.

viii Expected Contribution for Next Financial Year

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 information
is certified by the actuary. The actual return on plan assets for the year and estimate of contribution for the next year as per
actuarial 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 exposed
to various risks as follows -

a) Salary Increases- Actual salary increases will increase the Plan's liability. Increase in salary increase rate assumption in future
valuations will also increase the liability.

b) Investment Risk - If Plan is funded then assets liabilities mismatch and actual investment return on assets lower than the
discount 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 and
H 832 Lakh in 14.00% Compulsory Convertible Debentures (CCDs). The interest on the above said CCDs is due from LNJPV since
financial year 2016-17
H2,905.32 Lakh remain unpaid on March 31,2026. Also H3,261.05 Lakh is payable against supply of power
by LNJPV under a long-term Power Purchase Agreement (PPA) supported by Bank Guarantee of
H1,000 Lakh to LNJPV to secure
such PPA.

During the year, the Arbitral Tribunal vide its order dated 31st March, 2026 upheld LNJPV's claim for the principal amount under
the PPA, which is already recognised as payable in the Company's balance sheet, and rejected the Company's counterclaim
for 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 a
stay order. The Company firmly believes that it has credible case in its favour and also been advised by an expert, accordingly
the 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 following
reportable 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 its
business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment
performance 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 agreed
between the segments. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions
with 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 adjusted
directly 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 other
liabilities. Common assets and liabilities which can not be allocated to specific segments are shown as a part of unallocable
assets/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 prevail
in arms length transaction. Outstanding balances at the year end are unsecured and settlement occurs in cash. For the year ended
March 31,2026 and for the year ended March 31,2025, the Company has not recorded any impairment of receivables relating to
amount owed by related parties.

This assessment is undertaken through out the financial year through examining the financial position of the related parties and
the 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 relevant
data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following
methods 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 at
amortized cost is approximate to their carrying amounts largely due to the short-term maturities of these instruments. The fair
value of other non-current financial assets and liabilities (security deposit taken/given and advance to employees) carried at
amortized 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 as
interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings
approximates 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 on
quotes from banks and financial institutions. Management has evaluated the credit and non-performance risks associated with
its 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 management
framework. The Board of directors has established the risk management committee, which is responsible for developing and
monitoring 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 appropriate
risks limits and controls and to monitor risks and adherence to limits. Risk Management policies and systems are reviewed regularly
to 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 and
procedures and review the adequacy of the risk management framework in relation to risks faced by the Company. The audit
committee is assisted in its oversight role by internal audit. Internal audit undertakes review of risks management controls and
procedures, 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 commodity
prices. The market risk will affect the company's income or value of its holding of financial instruments. The objective of the market
risk 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 primarily
with respect to USD and EURO. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Company's functional currency. The Company evaluates exchange rate exposure arising
from foreign currency transactions and follows established risk management policies, including the use of derivatives like foreign
exchange 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 and
March 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 capital
loans 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 floating
rate 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, therefore
change 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 balance
sheet at fair value through Other Comprehensive Income. Material investments are managed on individual basis and all buy and
sell decisions are approved by the management. The primary goal of the investment strategy is to maximize investment returns.

Sensitivity Analysis

Increase/decrease of 10% in the equity prices would have impact of H892.06 Lakh (H795.59 Lakh in previous year) on the Other
Comprehensive 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 to
credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposit with banks
and 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 in
credit 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 initial
recognition by considering reasonable forward looking estimations.

Financial assets are written off when there is no reasonable expectation of recovery. Whereas the loans and receivables were
written 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 been
managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of
customers to which the Company grants credit terms in the normal course of business. The Company evaluates the concentration
of risk with respects to trade receivables as low, as its customers are located in several jurisdictions and industries and operate
in largely independent markets. A default on a financial assets is when a counter party fails to make the payment within 365
days, when they fall due. This definition of default is determined by considering the business environment in which the entity
operates 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 matrix
takes into account available external and internal credit risk factors such as financial condition, ageing of outstanding and the
Company'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 month
ECL, unless there is a significant risk of credit loss. However, based upon these parameters, there is no credit loss on these other
financial 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 banks
and 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 on
its ongoing assessment of the counter party's risk, the Company adjusts its exposures to various counter parties. Based on the
assessment 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. The
Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes
and policies related to such risk are overseen by senior management. The Company relies on a mix of borrowings, capital infusion
and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short
to medium term expansion needs. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of
financial assets and liabilities. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash
to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so
that 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 changes
in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of INR cash flows of highly
probable forecast transaction. The Company's risk management policy is to hedge around 50% to 90% of the net exposure with
forward exchange contract, having a maturity upto 12 months.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether
the 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 cash
flow hedge reserve will be reclassified to statement of profit & loss account.

(iv) d. Sensitivity Analysis

The following table demonstrates the sensitivity in the foreign exchange rates (USD, Euro and GBP) to the Indian Rupees with
all other variables held constant. The impact on the other component of Equity arises from foreign forward exchange contract
designated 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.

43 Capital Management

For the purpose of the Company's capital management, capital includes issued equity share capital, share premium and all other
equity reserves attributable to the equity shareholders of the parent. The primary objective of the Company's capital management
is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment
to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is
net 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 meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in
the 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 and
March 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's
Intangible Assets and PPE Based on such evaluation, which is also supported by external information, more particularly the market
value 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 dated
24th March 2021

a) The Company does not have any Benami Property, and no proceeding has been initiated or pending against the Company for
holding 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 the
statutory 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 the
company (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 the
understanding (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 the
funding 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, are
generally in agreement with the books of accounts of the Company of the respective quarters and differences, if any are not
material.

h) The Group has no such transaction which is not recorded in the Books of Accounts that has been surrendered or disclosed as
income during the 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).

i) The Company have not been declared wilful defaulter by any Banks or any other Financial Institution at any time during the
financial year.

j) The Company has utilized the borrowings from banks and financial institutions for the specific purpose for which it was taken
during the financial year.

48 Pursuant to the Notification issued by the Ministry of Labour & Employment (MoLE), Government of India, multiple existing
Labour legislations have been consolidated into a unified framework comprising four Labour Codes, collectively referred to as
the 'New Labour Codes' which became effective from 21st November 2025. Based on the information available, the Company
has re-assessed its Employee Benefits Obligations arising from implementation of the 'New Labour Codes' at the current
estimate, based on its best judgement is H1,056.69 Lakh and recognized the same as 'Exceptional Item' during the year ended
31st March 2026. The Company continues to monitor the Finalization of the Central/State Rules & further Clarifications from the
Government 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 Company
has 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 at
database level w.e.f 23rd April 2025. For the periods wherever audit trail (edit log) facility was enabled and operated throughout
the year for the respective accounting software, we did not come across any instance of the audit trail feature being tampered
with 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, has
approved, subject to the approval of shareholders and other requisite statutory and regulatory approvals, the issuance of up
to 24,70,000 convertible warrants at an issue price of H146 per share (including a premium of H136) ,determined in accordance
with the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended to LNJ Textiles
Advisory LLP (Promoter Group) on a preferential basis. An amount equivalent to 25% of the issue price shall be payable at the
time 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 a
period 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 the
shareholders and other regulatory authorities) the formulation and adoption of "RSWM Limited Employee Stock Option Plan
2026" ('ESOP Plan') for grant of employee stock options convertible into up to 9,70,000 equity shares of H10 each (face value) to
eligible employees of the Company and its subsidiaries. The ESOP Plan shall be implemented in accordance with the provisions
of 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 Yarn
project in the State of Jammu & Kashmir due to commercial non-viability and surrendered the leasehold land. Based on
management's assessment, legal advice and ongoing correspondence with J&K State Industrial Development Corporation
Limited, the balance refundable amount of H 477 lakhs has been considered fully recoverable and accordingly, no impairment
has been recognised.

50 Previous year figures have been regrouped/ rearranged, wherever considered necessary to confirm to current year's
classification.

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